Directors Report of Vardhman Textiles Ltd.

Mar 31, 2025

The Directors of your Company have pleasure in presenting their 52^nd Annual Report of the business and operations of the Company
along with the Audited Financial Statements for the year ended 31^st March, 2025.

1. FINANCIAL RESULTS:

The financial performance of your Company for the year ended 31^st March, 2025 is as under:-

(H in crore)

PARTICULARS	STANDALONE		CONSOLIDATED
	2024-25	2023-24	2024-25	2023-24
Revenue from operations (Net)	9,587.21	9,298.68	9,784.88	9,504.68
Other Income	367.47	333.54	335.96	325.94
Profit before Depreciation, Interest & Tax (PBDIT)	1,624.63	1,291.93	1,646.44	1,341.80
Interest and Financial expenses	77.02	101.99	77.28	102.28
Profit before Depreciation and Tax (PBDT)	1,547.61	1,189.94	1,569.16	1,239.52
Depreciation	397.92	398.96	400.92	404.59
Profit before Tax (PBT)	1,149.69	790.98	1,168.24	834.93
Provision for Tax - Current Tax	240.69	177.44	242.81	181.51
- Deferred Tax	29.93	5.91	38.71	16.72
Profit after tax (PAT)	879.07	607.63	886.72	636.70
Other Comprehensive Income/ (Expense)	0.98	3.81	0.84	3.89
Total Comprehensive Income for the period	880.05	611.44	887.56	640.59
Earnings per share (H)
- Basic	30.40	21.01	31.05	22.20
- Diluted	30.40	21.01	31.05	22.20

2. FINANCIAL ANALYSIS AND REVIEW OF
OPERATIONS:

PRODUCTION & SALES REVIEW:

During the year under review, your Company has registered
Revenue from Operations of H 9,587.21 crore as compared
to H 9,298.68 crore in the previous year. The export of the
Company (FOB value) increased from H 3,899.00 crore to
H 4,028.00 crore showing an increase of 3.31% over the
previous year. The business wise performance is as under:-

a) Yarn:

The production of Yarn increased from 2,62,291 MT
to 2,67,552 MT during the year 2024-25.

b) Fabric:

During the year, the production of grey fabric
increased from 204 million meter to 208 million meter.

The production of processed fabric increased from
154 million meter to 170 million meter.

c) Garment:

The number of garments produced during the year
2024-25 increased from 15.48 lac to 18.95 lac.

STANDALONE:

Profitability:

The Company earned profit before depreciation, interest
and tax of H 1,624.63 crore as against H 1,291.93 crore
in the previous year. After providing for depreciation of
H 397.92 crore (Previous Year H 398.96 crore), interest of
H 77.02 crore (Previous Year H 101.99 crore), provision
for current tax of H 240.69 crore (Previous Year H 177.44
crore), deferred tax of H 29.93 crore (Previous Year H 5.91
crore), the net profit from operations after comprehensive

income worked out to H 880.05 crore as compared to
H 611.44 crore in the previous year.

The balance available for appropriation after adding
balance in surplus account is H 8,097.11 crore. Out of this,
a sum of H 115.67 crore has been utilised towards dividend
and balance of H 7,981.44 crore is proposed to be carried
as surplus to the Balance sheet.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31^st March, 2025 was H 4,090.36
crore as compared to H 3,710.77 crore in the
previous year.

b) Current Assets:

The current assets as on 31^st March, 2025 were
H 6,057.22 crore as against H 6,218.41 crore in the
previous year. Inventory level was at H 3,681.80 crore as
compared to the previous year level of H 4,106.96 crore.

CONSOLIDATED:

Profitability:

The Company earned profit before depreciation, interest
and tax of H 1,646.44 crore as against H 1,341.80 crore
in the previous year. After providing for depreciation of
H 400.92 crore (Previous Year H 404.59 crore), interest of
H 77.28 crore (Previous Year H 102.28 crore), provision
for current tax of H 242.81 crore (Previous Year H 181.51
crore), deferred tax of H 38.71 crore (Previous Year H 16.72
crore), the net profit from operations after comprehensive
income worked out to H 887.56 crore as compared to
H 640.59 crore in the previous year.

The balance available for appropriation after adding
balance in surplus account is H 8,300.08 crore. Out of this,
a sum of H 96.76 crore has been utilised towards dividend
(net of minority adjustment of earlier years), an amount of H
1.11 crore has been transferred to Statutory Reserve and
balance of H 8,202.21 crore is proposed to be carried as
surplus to the Balance sheet.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31^st March, 2025 was H 4,147.96
crore as compared to H 3,766.55 crore in the
previous year.

b) Current Assets:

The current assets as on 31^st March, 2025 were
H 6,304.61 crore as against H 6,431.59 crore in the
previous year. Inventory level was at H 3,761.48 crore as
compared to the previous year level of H 4,179.89 crore.

FINANCIAL CONDITIONS & LIQUIDITY:

The Company enjoys a rating of “AA /Stable” from Credit
Rating Information Services of India (CRISIL) for long term
borrowings and “A1 ” for short term borrowings and
IND A1 for Commercial Paper from India Rating And
Research. Management believes that the Company''s
liquidity and capital resources should be sufficient to meet
its expected working capital needs and other anticipated
cash requirements. The position of liquidity and capital
resources of the Company is given below:- (H in crore)

PARTICULARS	2024-25	2023-24
Cash and Cash equivalents:
Beginning of the year	33.00	74.66
End of the year	52.11	33.00
Net cash provided (used) by:
Operating Activities	1,618.72	(1,062.45)
Investing Activities	(870.03)	1,106.83
Financing Activities	(729.57)	(86.04)

3. MANAGEMENT DISCUSSION AND ANALYSIS
REPORT:

Management Discussion and Analysis Report for the
year under review as stipulated under Regulation 34(2)
(e) of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations,
2015 is presented in a separate section forming part of
this Annual Report.

4. DIVIDEND:

The Board of Directors in its meeting held on 3^rd May, 2025
has recommended dividend of H 5/- per share on the fully
paid Equity Shares of the Company.

5. INVESTOR EDUCATION AND PROTECTION
FUND (IEPF):

Pursuant to the provisions of Section 124 and 125 of
the Companies Act, 2013, read with IEPF Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the
Rules''), all unpaid or unclaimed dividends are required to
be transferred by the Company to the IEPF established
by the Central Government after the completion of seven
years from the date of transfer to the Unpaid Dividend
Account of the Company. The shareholders whose
dividends have been transferred to the IEPF Authority can
claim their dividend from the Authority. The unclaimed or
unpaid dividend relating to the financial year 2017-18 is
due for remittance in the month of November, 2025 to
Investor Education and Protection Fund established by the
Central Government.

Further, according to the Rules, the shares in respect
of which dividend has not been paid or claimed by
shareholders for seven consecutive years or more shall
also be transferred to the IEPF Authority. The Company
has sent notice to all shareholders whose shares are due to
be transferred to the IEPF Authority and has also published
requisite advertisement in the newspapers in this regard.
The details of these shares are also provided on the
website of the Company at www.vardhman.com.

6. CONSOLIDATED FINANCIAL STATEMENT:

In accordance with Companies Act 2013 & applicable
Indian Accounting Standards, the Audited Consolidated
Financial Statements are provided in the Annual Report.

7. SUBSIDIARIES, JOINT VENTURES AND
ASSOCIATE COMPANIES:

The Company does not have any material subsidiary
and joint venture. Further, during the year, no company
have become or ceased to be subsidiary, joint venture or
associate of the Company.

The details of the financials of the subsidiary and associate
companies for the year 2024-25 are as follows:-

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged in the
business of investment. The earnings of the Company
mainly comes from the dividend/interest earned on its
investments and profits made on sale of investments.
During the financial year 2024-25, VTL recorded Revenue
from operations of H 5.51 crore against H 1.82 crore in the
previous year. The net profit of the Company worked out
to H 4.95 crore as compared to H 1.79 crore during the
previous year.

Vardhman Acrylics Limited (VAL)

This subsidiary of the Company is engaged in the business
of manufacturing of Acrylic Fibre. Presently, your Company
holds 70.74% shares in this subsidiary. During the financial
year 2024-25, VAL recorded Revenue from operations of
H 281.57 crore against H 297.48 crore in the previous year.
The net profit of the Company after comprehensive income
worked out to H 11.75 crore as compared to H 17.71 crore
in the previous year.

Vardhman Yarns and Threads Limited (VYTL)

Vardhman Yarns and Threads Limited, Joint Venture with
American & Efird Global, LLC (A&E), is an Associate of
the Company. It is engaged in the business of threads
manufacturing and distribution. Presently, your Company
holds 11% stake in VYTL. A&E is the second largest

player in threads manufacturing and distribution across
the world. During the year under review, the Standalone
Revenue from operations was H 1,195.51 crore as against
H 1,086.56 crore in the previous year showing an increase
of 10.03%. The net profit for the year after comprehensive
income worked out to H 205.42 crore as compared to
H 176.27 crore during last year.

Vardhman Special Steels Limited (VSSL)

Vardhman Special Steels Limited is an Associate of
the Company. Your Company holds 23.76% shares of
VSSL. The Revenue from operations of the Company
was H 1,764.41 crore as compared to H 1,661.36 crore
in the previous year. The net profit for the year after
comprehensive income worked out to H 92.81 crore as
compared to H 91.80 crore in the previous year.

Vardhman Spinning & General Mills Limited (VSGM)

Vardhman Spinning & General Mills Limited is an Associate
of the Company. Your Company holds 50% shares of
VSGM. It is a trading company. However, during the year,
the Company has not traded any goods and as such there
is no revenue from operations.

8. DIRECTORS:

Liable to retire by Rotation: In accordance with the
provisions of the Articles of Association of the Company,
Mrs. Suchita Jain and Mr. Neeraj Jain, Directors of the
Company, retires by rotation at the conclusion of the
forthcoming Annual General Meeting and being eligible,
offers themselves for re-appointment. The Board
recommended their re-appointment for the consideration
of the Members of the Company at the ensuing Annual
General Meeting.

Appointment of Directors: During the year under
review, Dr. Prem Kumar was appointed as an Independent
Director of the Company for a term of five (5) consecutive
years w.e.f. 30^th July, 2024. His appointment was further
approved by the Members of the Company in the Annual
General Meeting held on 19^th September, 2024.

Cessation from Directorship: During the year under
review, Mr. Prafull Anubhai, Independent Director, ceased
to be Director of the Company w.e.f. 19^th September,
2024, on completion of his second term of appointment.

Declaration by Independent Directors:

The Independent Directors have submitted their disclosures
to the Board that they fulfil all the requirements as
stipulated in section 149(6) of the Companies Act, 2013 so
as to qualify themselves to be appointed as Independent

Directors under the provisions of the Companies Act, 2013
and the relevant rules thereof.

Your Board confirms that in its opinion the Independent
Directors possess the requisite integrity, experience,
expertise, proficiency and qualifications. All the Independent
Directors on the Board of the Company are registered with
the Indian Institute of Corporate Affairs, Manesar, Gurgaon
(IICA) as notified by the Central Government under section
150(1) of the Companies Act, 2013 and, if applicable, shall
undergo online proficiency self-assessment test within the
time prescribed by the IICA.

Familiarization programmes for Board Members:

Your Company has formulated Familiarization Programme
for all the Board members in accordance with Regulation
25 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and the Schedule IV
of the Companies Act, 2013 which provides that the
Company shall familiarize the Independent Directors
with the Company, their roles, rights, responsibilities in
the Company, nature of Industry in which the Company
operates, business model of the Company, etc.
through various programs.

The Familiarization Programme for Board members may be
accessed on the Company''s website at the link: https://
www.vardhman.com/Document/Report/Company%20
Information/Policies/Vardhman%20Textiles%20Ltd/
Familarisation_Programme_for_Board_Members.pdf

Annual Evaluation of the Board Performance:

The meeting of Independent Directors of the Company for
the financial year 2024-25 was held on 17^th March, 2025 to
evaluate the performance of Non-Independent Directors,
Chairman of the Company and the Board as a whole.

The evaluation was done by way of discussions on the
performance of the Non-Independent Directors, Chairman
and Board as a whole.

A policy on the performance evaluation of Independent
Directors, Board, Committees and other individual
Directors which includes criteria for performance evaluation
of non-executive directors and executive directors have
been formulated by the Company.

9. NOMINATION AND REMUNERATION POLICY:

In compliance with Section 178 of the Companies Act,
2013 and Regulation 19 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the
Nomination and Remuneration Policy of the Company has

been duly approved and adopted by the Board pursuant
to recommendations of the Nomination and Remuneration
Committee of the Company and may be accessed
on the website of the Company at the link: https://
www.vardhman.com/Document/Report/Company%20
Information/Policies/Vardhman%20Textiles%20Ltd/
Nomination_&_Remuneration_Policy.pdf. As mandated
by proviso to Section 178(4) of the Companies Act, 2013,
salient features of Nomination and Remuneration Policy are
as under:

a) Identifying persons who are qualified to become
Directors and who may be appointed in Senior
Management in accordance with the criteria laid down
and recommending to the Board their appointment
and removal.

b) Formulating the criteria for determining qualifications,
positive attributes and independence of a Director
and evaluating the balance of skills, knowledge
and experience on Board and on the basis of such
evaluation, prepare a description of the role and
capabilities required of an Independent Director.

c) Recommending to the Board, policy relating to
remuneration of Directors (Whole time Directors,
Executive Directors etc.), Key Managerial Personnel
and other employees while ensuring the following:-

i. That the level and composition of remuneration
is reasonable and sufficient to attract, retain and
motivate directors of the quality required to run
the company successfully.

ii. That relationship of remuneration to performance
is clear and meets appropriate performance
benchmarks.

iii. That remuneration to directors, key managerial
personnel and senior management involves
a balance between fixed and incentive pay
reflecting short and long term performance
objectives appropriate of the working of the
Company and its goals.

d) Formulating the criteria for evaluating performance of
the Board and all the Directors.

e) Devising a policy on diversification of Board.

f) Determining whether to extend or continue the term
of appointment of the independent director on the
basis of the report of performance evaluation of
independent directors.

g) Recommending to the Board remuneration payable
to the Senior Management.

10. KEY MANAGERIAL PERSONNEL (KMP):

In compliance with the provisions of Section 203 of the
Companies Act, 2013, following are the KMPs of the
Company as on 31^st March, 2025:

S. No.	Name	Designation
1.	S.P. Oswal	Chairman & Managing Director
2.	Rajeev Thapar	Chief Financial Officer
3.	Sanjay Gupta	Company Secretary

11. NUMBER OF BOARD MEETINGS:

During the year under review, the Board met Seven (7)
times and the intervening gap between any two meetings
was within the period prescribed under Companies
Act, 2013. The details of Board Meeting are set out in
Corporate Governance Report which forms part of this
Annual Report.

12. AUDITORS AND AUDITORS’ REPORT:

Statutory Auditors:

M/s Deloitte Haskins & Sells, LLP, Chartered Accountants (Firm
Registration No. 117366W/W-100018) were re-appointed as
Statutory Auditors of the Company for a second consecutive
term of 5 years at the 49^th Annual General Meeting of the
Company held on 30^th September, 2022.

Further, the Statutory Auditors of the Company have
submitted Auditors'' Report on the accounts of the
Company for the accounting year ended 31^st March, 2025.

This Auditors'' Report is self-explanatory and requires no
comments.

Secretarial Auditor:

M/s. Ashok K Singla & Associates, Company Secretary
in Practice, were appointed as Secretarial Auditors of the
Company by the Board of Directors of the Company in
its meeting held on 9^th May, 2024 for the financial year
2024-25. The Secretarial Auditors of the Company have
submitted their Report in Form No. MR-3 as required
under Section 204 of the Companies Act, 2013 for the
financial year ended 31^st March, 2025. This Report is
self-explanatory and requires no comments. The Report
forms part of this report as Annexure I.

Further, pursuant to the amended provisions of Regulation
24A of the SEBI (Listing Obligations and Disclosure
Requirements) (“LODR”) Regulations, 2015 and Section
204 of the Act read with Rule 9 of the Companies
(Appointment and Remuneration of Managerial Personnel)

Rules, 2014, the Board of Directors of the Company, on the
recommendation of the Audit Committee, have approved
and recommended the appointment of M/s. Ashok K
Singla & Associates, Peer Reviewed Company Secretary
in Practice (CP No. 1942), as Secretarial Auditors of the
Company for a term of 5 (Five) consecutive years from the
FY 2025-26 to 2029-30, for approval of the Members at
ensuing AGM of the Company. Brief resume and other
details of M/s. Ashok K Singla & Associates, Company
Secretaries in Practice, are separately disclosed in the
Notice of ensuing AGM.

M/s. Ashok K Singla & Associates have given their
consent to act as Secretarial Auditors of the Company and
confirmed that their aforesaid appointment (if made) would
be within the prescribed limits under the Act & Rules made
thereunder and SEBI (LODR) Regulations. They have also
confirmed that they are not disqualified to be appointed
as Secretarial Auditors in terms of provisions of the Act &
Rules made thereunder and SEBI (LODR) Regulations.

Cost Auditor:

The Company is maintaining the Cost Records, as
specified by the Central Government under section 148(1)
of the Companies Act, 2013.

The Board of Directors has appointed M/s Ramanath
Iyer & Company, Cost Accountants, New Delhi, as the
Cost Auditors of the Company to conduct Cost Audit
of the Accounts for the financial year ended 2025-26.
However, as per the provisions of Section 148 of the
Companies Act, 2013, read with Companies (Cost
Records and Audit) Rules, 2014, the remuneration to
be paid to the Cost Auditors is subject to ratification by
Members at the Annual General Meeting. Accordingly, the
remuneration to be paid to M/s Ramanath Iyer & Company,
Cost Accountants, New Delhi, for financial year 2025-26 is
placed for ratification by the Members.

13. AUDIT COMMITTEE & VIGIL MECHANISM:

Composition of Audit Committee:

The Audit Committee comprises of Mr. Udeypaul Singh Gill,
Mr. Suresh Kumar, Mrs. Harpreet Kaur Kang, Independent
Directors and Ms. Sagrika Jain, Executive Director.
Mr. Udeypaul Singh Gill is the Chairman of the Committee
and Company Secretary of the Company is the Secretary
of the Committee. All the recommendations made by the
Audit Committee were accepted by the Board.

Apart from the Audit Committee, the Company has also
constituted other Board level Committees as mandated by
applicable laws. Details of the Committees, along with their

composition, charters and meetings held during the year,
are provided in the ‘Corporate Governance Report'', which
forms a part of this Report. Further, during the FY 2024-25,
the Board has accepted all the recommendations of its
Committees.

Vigil Mechanism:

Pursuant to the provisions of section 177(9) of the
Companies Act, 2013, the Company has established a
“Vigil Mechanism” incorporating Whistle Blower Policy
in terms of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, for employees and
Directors of the Company, for expressing the genuine
concerns of unethical behavior, actual or suspected fraud
or violation of the codes of conduct by way of direct access
to the Chairman/ Chairman of the Audit Committee.

The Company has also provided adequate safeguards
against victimization of employees and Directors who
express their concerns.

The Policy on Vigil Mechanism and Whistle Blower Policy
as approved by the Board may be accessed on the
Company''s website at the link: https://www.vardhman.
com/Document/Report/Company%20Information/
Policies/Vardhman%20Textiles%20Ltd/Whistle_Blower_
Policy.pdf

14. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate
Governance. Corporate Governance is about maximizing
shareholder value legally, ethically and sustainably.
A separate report on Corporate Governance forming part
of the Annual Report of the Company is annexed hereto.
A certificate from the Practising Company Secretary of the
Company regarding compliance of conditions of Corporate
Governance as stipulated under the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 is annexed to the report on Corporate Governance.

15. CORPORATE SOCIAL RESPONSIBILITY
(CSR):

Vision & Core areas of CSR: Your Company is committed
to and fully aware of its CSR, the guidelines in respect of
which were more clearly laid down in the Companies Act,
2013. The Company''s vision on CSR is that the Company
being a responsible Corporate Citizen would continue to
make a serious endeavor for a quality value addition and
constructive contribution in building a healthy and better
society through its CSR related initiatives and focus on
education, environment, health care and other social causes.

CSR Policy: The CSR Policy of the Company indicating the
activities to be undertaken by the Company, as approved
by the Board, may be accessed on the Company''s website
at the link: https://www.vardhman.com/Document/
Report/Company%20Information/Policies/Vardhman%20
Textiles%20Ltd/Corporate_Social_Responsibility_Policy.pdf
During the year, the Company has spent H 14.39 crore
on CSR activities. Out of this, an amount of H 5.30 crore
pertains to FY 2024-25.

The disclosures related to CSR activities pursuant to
Section 134(3) of the Companies Act, 2013 read with Rule
9 of Companies (Accounts) Rules, 2014 and Companies
(Corporate Social Responsibility) Rules, 2014 is annexed
hereto and form part of this report as Annexure II.

16. BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT (BRSR):

The SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 mandate the inclusion of the BRSR as
part of the Annual Report for top 1000 listed entities based
on market capitalization. In compliance with the Listing
Regulations, BRSR is available on the Company''s website
at the link: https://www.vardhman.com/Document/
Report/Compliances/BRR/Vardhman%20Textiles%20Ltd/
BRSR_2024-25.pdf

17. DIVIDEND DISTRIBUTION POLICY (DDP):

As per Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the top
1,000 listed companies are required to formulate a DDP.
Accordingly, a DDP was adopted to set out the parameters
and circumstances that will be taken into account by the
Board in recommending the distribution of dividend to
its shareholders and/or retaining profits earned by the
Company. The Policy is available on the Company''s website
at the link: https://www.vardhman.com/Document/
Report/Company%20Information/Policies/Vardhman%20
Textiles%20Ltd/Dividend_Distribution_Policy.pdf

18. RISK MANAGEMENT:

The Risk Management Policy required to be formulated
under the Companies Act, 2013 and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015, has been duly formulated and approved by the Board
of Directors of the Company. The aim of Risk Management
Policy is to maximize opportunities in all activities and to
minimize adversity. The Policy includes identifying types
of risks and its assessment, risk handling, monitoring and
reporting, which in the opinion of the Board may threaten
the existence of the Company.

The Risk Management Policy may be accessed on the
Company''s website at the link: https://www.vardhman.
com/Document/Report/Company%20Information/
Policies/Vardhman%20Textiles%20Ltd/Risk_
Management_Policy.pdf

19. INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial
controls with reference to financial statements. During the
year, such controls were tested and no reportable material
weakness in the design or operation was observed.

A report on the Internal Financial Controls under clause
(i) of sub-section 3 of section 143 of the Companies
Act, 2013, as given by the Statutory Auditors of the
Company forms part of Independent Auditor''s Report
on Standalone Financial Statements and Consolidated
Financial Statements as Annexure A.

20. PARTICULARS OF CONTRACTS OR
ARRANGEMENTS MADE WITH RELATED
PARTIES:

All contracts/arrangements/transactions entered into
by the Company during the financial year with related
parties were in the ordinary course of business and on
an arm''s length basis. During the year, the Company had
not entered into any contract/arrangement/transaction
with related parties which could be considered material
in accordance with the provisions of Regulation 23 of the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015. Accordingly, the disclosure of Related
Party Transactions as required under Section 134(3)(h) of
the Companies Act, 2013 in Form AOC-2 is not applicable.

The Policy on dealing with related party transactions
as approved by the Board may be accessed on the
Company''s website at the link: https://www.vardhman.
com/Document/Report/Company%20Information/
Policies/Vardhman%20Textiles%20Ltd/Related_Party_
Transaction_Policy.pdf

Your Directors draw attention of the Members to Note
46 to the standalone financial statements which sets out
related party disclosures.

21. PARTICULARS OF LOANS, GUARANTEES
OR INVESTMENTS MADE UNDER SECTION
186 OF THE COMPANIES ACT, 2013:

Particulars of loans given, investments made, guarantees
given and securities provided along with the purpose for
which the loan or guarantee or security is proposed to
be utilized by the recipient are provided in the standalone

financial statement (Please refer to Note 4, 5, 9 and 12 to
the standalone financial statements).

22. CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major
emphasis in our Company. Efforts are made to optimize
the energy cost while carrying out the manufacturing
operations. Particulars with respect to conservation
of energy and other areas as per Section 134(3)(m) of
the Companies Act, 2013, read with the Companies
(Accounts) Rules, 2014, are annexed hereto and form part
of this report as Annexure III.

23. ANNUAL RETURN:

In terms of Section 92(3) and 134(3)(a) of the Companies Act,
2013, the Annual Return of the Company is available on the
website of the Company at the link: https://www.vardhman.
com/Investors/Compliances.

24. HUMAN RESOURCES /INDUSTRIAL
RELATIONS:

Human resource is considered as the most valuable of
all resources available to the Company. The Company
continues to lay emphasis on building and sustaining
an excellent organization culture based on human
performance. The Management has been continuously
endeavoring to build high performance culture on one
hand and amiable work environment on the other hand.
As on 31^st March, 2025, the Company employed around
23,196 employees on permanent rolls.

Pursuit of proactive policies for industrial relations has
resulted in a peaceful and harmonious situation on the
shop floors of the various plants.

25. PARTICULARS OF EMPLOYEES AND
RELATED DISCLOSURES:

The disclosures in respect of managerial remuneration as
required under section 197(12) read with Rule 5(1) of the
Companies (Appointment & Remuneration of Managerial
Personnel) Rules, 2014 are annexed hereto and forms part
of this report.

A statement showing the names and other particulars of the
employees drawing remuneration in excess of the limits set
out in Rule 5(2) and 5(3) of the Companies (Appointment
& Remuneration of Managerial Personnel) Rules, 2014 is
annexed hereto and forms part of this report.

All the above details are provided in Annexure IV.

In terms of section 197(14) of the Companies Act, 2013, the
Company does not have any Holding Company. Further, none
of the Director of the Company has received any remuneration
or commission from any subsidiary company.

26. MATERIAL CHANGES AND COMMITMENT,
IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY OCCURRED
BETWEEN THE END OF THE FINANCIAL
YEAR TO WHICH THE FINANCIAL
STATEMENTS RELATE AND THE DATE OF
THE REPORT:

No material changes and commitments affecting the financial
position of the Company occurred between the end of the
financial year to which this financial statements relate and the
date of this report.

27. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(5) of the Companies
Act, 2013, the Board hereby submit its Responsibility
Statement that: —

a. in the preparation of the annual accounts, the
applicable accounting standards have been followed
along with the proper explanation relating to material
departures;

b. appropriate accounting policies have been selected
and applied consistently, and have made judgments
and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the
Company as at 31^st March, 2025 and of the profit of
the Company for the year ended on 31^st March, 2025;

c. proper and sufficient care has been taken for the
maintenance of adequate accounting records in
accordance with the provisions of the Companies Act,
2013, for safeguarding the assets of the Company
and for preventing and detecting fraud and other
irregularities;

d. the annual accounts have been prepared on a going
concern basis;

e. the Internal financial controls has been laid down to
be followed by the Company and that such internal
financial controls are adequate and are operating
effectively; and

f. a proper system has been devised to ensure compliance
with the provisions of all applicable laws and such
systems are adequate and operating effectively.

28. GENERAL DISCLOSURES:

Your Directors state that no disclosure or reporting is required
in respect of the following items as there were no transactions
on these items during the year under review:

1. Details relating to deposits covered under Chapter V
of the Companies Act, 2013.

2. Issue of equity shares with differential rights as to
dividend, voting or otherwise.

3. Significant or material orders passed by the Regulators
or Courts or Tribunals which impact the going concern
status and Company''s operations in future.

4. Change in nature of Business of the Company.

5. No fraud has been reported by the Auditors to the
Audit Committee or the Board.

6. There is no proceeding pending under the Insolvency
and Bankruptcy Code, 2016.

7. There was no instance of one time settlement with
any Bank or Financial Institution.

Further, your Directors state that the Company has complied
with the provisions relating to constitution of Internal
Complaints Committee under the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013 and there was no case filed under the said Act and
applicable Secretarial Standards with respect to Meetings of
the Board of Directors (SS-1) and General Meetings (SS-2)
issued by the Institute of Company Secretaries of India.

In addition to this, all the policies as required under the Act
or the SEBI LODR Regulations have been formulated by the
Company and are available on the website of the Company,
links whereof are provided in the ‘Corporate Governance
Report'', which forms part of this report.

29. VARDHMAN TEXTILES LIMITED EMPLOYEE
STOCK OPTION PLAN 2024:

During the financial year 2023-24, the Board of Directors of
your Company in its meeting held on 24^th January, 2024 had
approved ‘Vardhman Textiles Limited Employee Stock Option
Plan 2024''. The same has also been approved by the Members
through Postal Ballot ended on 10^th March, 2024. The maximum
no. of Options that can be granted under the Scheme are
34,70,097 (i.e. 1.20% of the no. of shares outstanding as on
31^st March, 2024). Further, the Nomination & Remuneration
Committee of the Board of Directors of the Company in its

meeting held on 3^rd April, 2024 has granted 31,75,000 Options
to the employees under this Plan. One Option entitles the
holder to apply for one equity share of the Company after a
vesting period of 1 year from the date of grant.

The details as required to be disclosed are put on the
Company''s website and may be accessed at: https://
www.vardhman.com/Document/Report/Compliances/
Miscellaneous/Vardhman%20Textiles%20Ltd/ESOP_
Disclosure_2024-25.pdf

30. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere
gratitude to the Government, Bankers, Business Constituents
and Shareholders for their continued and valuable
co-operation and support to the Company and look forward
to their continued support and co-operation in future too.

They also take this opportunity to express their deep
appreciation for the devoted and sincere services rendered by
the employees at all levels of the operations of the Company
during the year.

FOR AND ON BEHALF OF THE BOARD

Place: Ludhiana (S.P. Oswal)

Dated: 3^rd May, 2025 Chairman & Managing Director

---

Mar 31, 2024

The Directors of your Company have pleasure in presenting their 51^st Annual Report of the business and operations of the Company along with the Audited Financial Statements for the year ended 31^st March, 2024.

1. FINANCIAL RESULTS:

The financial performance of your Company for the year ended 31^st March, 2024 is as under:-

(H in crore)

PARTICULARS	STANDALONE		CONSOLIDATED
	2023-24	2022-23	2023-24	2022-23
Revenue from operations (Net)	9,298.68	9,840.79	9,504.68	10,13749
Other Income	333.54	192.80	325.94	191.95
Profit before Depreciation, Interest & Tax (PBDIT)	1,291.93	1,47785	1,341.80	1,556.49
Interest and Financial expenses	101.99	101.86	102.28	102.15
Profit before Depreciation and Tax (PBDT)	1,189.94	1,375.99	1,239.52	1,454.34
Depreciation	398.96	388.95	404.59	394.43
Profit before Tax (PBT)	790.98	98704	834.93	1,059.91
Provision for Tax - Current	17744	224.98	181.51	235.96
- Deferred Tax	5.91	12.99	16.72	19.20
Profit after tax (PAT)	60763	749.07	636.70	804.75
Other Comprehensive Income/ (Expense)	3.81	2.76	3.89	2.88
Total Comprehensive Income for the period	611.44	751.83	640.59	80763
Earnings per share (H)
- Basic	21.01	25.91	22.20	2796
- Diluted	21.01	25.90	22.20	2795

2. FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:

PRODUCTION & SALES REVIEW:

During the year under review, your Company has registered Revenue from Operations of H 9,298.68 crore as compared to H 9,840.79 crore in the previous year. The exports of the Company (FOB value) decreased from H 4,242.52 crore to H 3,899.00 crore showing a decline of 8.52% over the previous year. The business wise performance is as under:-

a) Yarn:

The production of Yarn increased from 2,33,314 MT to 2,62,291 MT during the year 2023-24.

b) Fabric:

During the year, the production of grey fabric increased from 182 million meter to 204 million meter. The production of processed fabric increased from 143 million meter to 154 million meter.

c) Garment:

The number of garments produced during the year 2023-24 reduced from 18,00,955 to 15,47982.

STANDALONE:

Profitability:

The Company earned profit before depreciation, interest and tax of H 1,291.93 crore as against H 1,47785 crore in the previous year. After providing for depreciation of H 398.96 crore (Previous Year H 388.95 crore), interest of H 101.99 crore (Previous Year H 101.86 crore), provision for current tax of H 17744 crore (Previous Year H 224.98 crore), deferred tax of H 5.91 crore (Previous Year H 12.99 crore), the net profit from operations after comprehensive income worked out to H 611.44 crore as compared to H 751.83 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is H 721728 crore.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31^st March, 2024 was H 3,710.77 crore as compared to H 3,880.50 crore in the previous year.

b) Current Assets:

The current assets as on 31^st March, 2024 were H 6,218.41 crore as against H 5,558.14 crore in the previous year. Inventory level was at H 4,106.96 crore as compared to the previous year level of H 2,312.16 crore.

CONSOLIDATED:

Profitability:

The Company earned profit before depreciation, interest and tax of H 1,341.80 crore as against H 1,556.49 crore in the previous year. After providing for depreciation of H 404.59 crore (Previous Year H 394.43 crore), interest of H 102.28 crore (Previous Year H 102.15 crore), provision for current tax of H 181.51 crore (Previous Year H 235.96 crore), deferred tax of H 16.72 crore (Previous Year H 19.20 crore), the net profit from operations after comprehensive income worked out to H 640.59 crore as compared to H 80763 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is H 7,416.30 crore.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31^st March, 2024 was H 3,766.56 crore as compared to H 3,934.97 crore in the previous year.

b) Current Assets:

The current assets as on 31^st March, 2024 were H 6,431.59 crore as against H 5,784.52 crore in the previous year. Inventory level was at H 4,179.89 crore as compared to the previous year level of H 2,392.68 crore.

FINANCIAL CONDITIONS & LIQUIDITY:

The Company enjoys a rating of "AA /Stable" from Credit Rating Information Services of India (CRISIL) for long term borrowings and "A1 " for short term borrowings and IND A1 for Commercial Paper from India Rating And Research. Management believes that the Company''s liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:-

PARTICULARS	2023-24	2022-23
Cash and Cash equivalents:
Beginning of the year	74.66	62.06
End of the year	33.00	74.66

PARTICULARS	2023-24	2022-23
Net cash provided (used) by:
Operating Activities	(1,062.45)	1,814.81
Investing Activities	1,106.83	(1,405.56)
Financing Activities	(86.04)	(396.65)

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2) (e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

4. DIVIDEND:

The Board of Directors in its meeting held on 9^th May, 2024 has recommended dividend of H 4/- per share on the fully paid Equity Shares of the Company.

5. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules''), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government after the completion of seven years from the date of transfer to the Unpaid Dividend Account of the Company. The shareholders whose dividends have been transferred to the IEPF Authority can claim their dividend from the Authority. The unclaimed or unpaid dividend relating to the financial year 2016-17 is due for remittance in the month of November, 2024 to Investor Education and Protection Fund established by the Central Government.

Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more shall also be transferred to the IEPF Authority. The Company has sent notice to all shareholders whose shares are due to be transferred to the IEPF Authority and has also published requisite advertisement in the newspapers in this regard.

The details of these shares are also provided on the website of the Company at www.vardhman.com.

6. CONSOLIDATED FINANCIAL STATEMENT:

In accordance with Companies Act 2013 & Indian Accounting Standards (Ind AS) 110 on ''Consolidated Financial Statements'' read with Ind AS 111 on ''Joint Arrangements'' and Ind AS 112 on ''Disclosure of Interest in other entities'', the Audited Consolidated Financial Statements are provided in the Annual Report.

7. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any material subsidiary. The details of the financials of the subsidiary and associate companies for the year 2023-24 are as follows:-

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged in the business of investment. The earnings of the Company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the financial year 2023-24, VTL recorded Revenue from operations of H 1.82 crore against H 0.87 crore in the previous year. The net profit of the Company worked out to H 1.79 crore as compared to H 0.39 crore during the previous year.

Vardhman Acrylics Limited (VAL)

This subsidiary of the Company is engaged in the business of manufacturing of Acrylic Fibre. Presently, your Company holds 70.74% shares in this subsidiary. During the financial year 2023-24, VAL recorded Revenue from operations of H 29748 crore against H 426.66 crore in the previous year. The net profit of the Company after comprehensive income worked out to H 1771 crore as compared to H 33.04 crore in the previous year.

Vardhman Yarns and Threads Limited (VYTL)

Vardhman Yarns and Threads Limited, Joint Venture with American & Efird Global, LLC (A&E), is an Associate of the Company. It is engaged in the business of threads manufacturing and distribution. Presently, your Company holds 11% stake in VYTL. A&E is the second largest player in threads manufacturing and distribution across the world. During the year under review, the Standalone Revenue from operations was H 1,086.56 crore as against H 1,089.57 crore in the previous year showing a marginal decline of

0.28%. The net profit for the year after comprehensive income worked out to H 176.27 crore as compared to H 142.12 crore during last year.

Vardhman Special Steels Limited (VSSL)

Vardhman Special Steels Limited is an Associate of the Company. Your Company holds 23.84% shares of VSSL.The Revenue from operations of the Company was H 1,661.36 crore as compared to H 1,734.99 crore in the previous year. The net profit for the year after comprehensive income worked out to H 91.80 crore as compared to H 100.17 crore in the previous year.

Vardhman Spinning & General Mills Limited (VSGM)

Vardhman Spinning & General Mills Limited is an Associate of the Company. Your Company holds 50% shares of VSGM. It is a trading company. However, during the year, the Company has not traded any goods. The Revenue from operations of the Company was H 0.003 lac as against H 0.006 lac in the previous year.

8. DIRECTORS:

Liable to retire by Rotation: In accordance with the provisions of the Articles of Association of the Company, Mr. Sachit Jain, Director of the Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers himself for reappointment. The Board recommended his re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Appointment of Directors: During the year under review, Mr. Atul Khosla was appointed as an Independent Director of the Company for a term of five (5) consecutive years w.e.f. 4^th August, 2023. His appointment was further approved by the Members of the Company in the Annual General Meeting held on 30^th September, 2023.

Cessation from Directorship: During the year under review, Dr. Parampal Singh, Independent Director, ceased to be Director of the Company w.e.f. 27^th November, 2023, on completion of his second term of appointment.

Declaration by Independent Directors:

The Independent Directors have submitted their disclosures to the Board that they fulfil all the requirements as stipulated in section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof.

Your Board confirms that in its opinion the Independent Directors possess the requisite integrity, experience,

expertise, proficiency and qualifications. All the Independent Directors on the Board of the Company are registered with the Indian Institute of Corporate Affairs, Manesar, Gurgaon (IICA) as notified by the Central Government under section 150(1) of the Companies Act, 2013 and, if applicable, shall undergo online proficiency self-assessment test within the time prescribed by the IICA.

Familiarization programmes for Board Members:

Your Company has formulated Familiarization Programme for all the Board members in accordance with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Schedule IV of the Companies Act, 2013 which provides that the Company shall familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of Industry in which the Company operates, business model of the Company, etc. through various programs.

The Familiarization Programme for Board members may be accessed on the Company''s website at the link: https:// www.vardhman.com/Document/Report/Company%20 Information/Policies/Vardhman%20Textiles%20Ltd/ Familarisation Programme for Board Members.pdf

Annual Evaluation of the Board Performance:

The meeting of Independent Directors of the Company for the financial year 2023-24 was held on 22^nd March, 2024 to evaluate the performance of Non-Independent Directors, Chairman of the Company and the Board as a whole.

The evaluation was done by way of discussions on the performance of the Non- Independent Directors, Chairman and Board as a whole.

A policy on the performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of nonexecutive directors and executive directors have been formulated by the Company.

I. NOMINATION AND REMUNERATION POLICY:

In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Policy of the Company has been duly approved and adopted by the Board pursuant to recommendations of Nomination and Remuneration Committee of the Company and may be accessed on the website of the Company at the link: https:// www.vardhman.com/Document/Report/Company%20 Information/Policies/Vardhman%20Textiles%20Ltd/

Nomination & Remuneration Policy.pdf. As mandated

by proviso to Section 178(4) of the Companies Act,

2013, salient features of Nomination and Remuneration

Policy are as under:

a) Identifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down and recommending to the Board their appointment and removal.

b) Formulating the criteria for determining qualifications, positive attributes and independence of a Director and evaluating the balance of skills, knowledge and experience on Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an Independent Director.

c) Recommending to the Board, policy relating to remuneration of Directors (Whole time Directors, Executive Directors etc.), Key Managerial Personnel and other employees while ensuring the following:-

i. That the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully.

ii. That relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

iii. That remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate of the working of the Company and its goals.

d) Formulating the criteria for evaluating performance of the Board and all the Directors.

e) Devising a policy on diversification of Board.

f) Determining whether to extend or continue the term of appointment of the independent director on the basis of the report of performance evaluation of independent directors.

g) Recommending to the Board remuneration payable to the Senior Management.

10. KEY MANAGERIAL PERSONNEL (KMP):

In compliance with the provisions of Section 203 of the

Companies Act, 2013, following are the KMPs of the

Company as on 31^st March, 2024:

S. Name No.	Designation
1. S.P Oswal	Chairman & Managing Director
2. Rajeev Thapar	Chief Financial Officer
3. Sanjay Gupta	Company Secretary

11. NUMBER OF BOARD MEETINGS:

During the year under review, the Board met Five (5) times and the intervening gap between any two meetings was within the period prescribed under Companies Act, 2013. The details of Board Meeting are set out in Corporate Governance Report which forms part of this Annual Report.

12. AUDITORS AND AUDITORS'' REPORT:

Statutory Auditors:

M/s Deloitte Haskins & Sells, LLP, Chartered Accountants (Firm Registration No. 117366W/W-100018) were reappointed as Statutory Auditors of the Company for a second consecutive term of 5 years at the 49^th Annual General Meeting of the Company held on 30^th September, 2022.

Further, the Statutory Auditors of the Company have submitted Auditors'' Report on the accounts of the Company for the accounting year ended 31^st March, 2024.

This Auditors'' Report is self-explanatory and requires no comments.

Secretarial Auditor:

M/s. Ashok K Singla & Associates, Company Secretary in Practice, were appointed as Secretarial Auditors of the Company by the Board of Directors of the Company in its meeting held on 5^th May, 2023 for the financial year 2023-24.

The Secretarial Auditors of the Company have submitted their Report in Form No. MR-3 as required under Section 204 of the Companies Act, 2013 for the financial year ended 31^st March, 2024. This Report is self-explanatory and requires no comments. The Report forms part of this report as Annexure I.

Cost Auditor:

The Company is maintaining the Cost Records, as specified by the Central Government under section 148(1) of Companies Act, 2013.

The Board of Directors had appointed M/s. Ramanath Iyer & Company, Cost Accountants, New Delhi, as the

Cost Auditors of the Company to conduct Cost Audit of the Accounts for the financial year ended 2023-24. The Cost Audit Report for the financial year 2023-24 is under finalization and will be submitted to the requisite authorities within due course of time.

13. AUDIT COMMITTEE & VIGIL MECHANISM: Composition of Audit Committee:

The Audit Committee comprises of Mr. Prafull Anubhai, Mr. Suresh Kumar, Mrs. Harpreet Kaur Kang, Independent Directors and Ms. Sagrika Jain, Executive Director. Mr. Prafull Anubhai is the Chairman of the Committee and Company Secretary of the Company is the Secretary of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism:

Pursuant to the provisions of section 177(9) of the Companies Act, 2013, the Company has established a "Vigil Mechanism" incorporating Whistle Blower Policy in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for employees and Directors of the Company, for expressing the genuine concerns of unethical behavior, actual or suspected fraud or violation of the codes of conduct by way of direct access to the Chairman/ Chairman of the Audit Committee.

The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns.

The Policy on Vigil Mechanism and Whistle Blower Policy as approved by the Board may be accessed on the Company''s website at the link: https://www.vardhman.com/ Document/Report/Company%20Information/Policies/ Vardhman%20Textiles%20Ltd/Whistle Blower Policy.pdf

14. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. Corporate Governance is about maximizing shareholder value legally, ethically and sustainably. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Practising Company Secretary of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the report on Corporate Governance.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Vision & Core areas of CSR: Your Company is committed to and fully aware of its CSR, the guidelines in respect of which were more clearly laid down in the Companies Act, 2013. The Company''s vision on CSR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for a quality value addition and constructive contribution in building a healthy and better society through its CSR related initiatives and focus on education, environment, health care and other social causes.

CSR Policy: The CSR Policy of the Company indicating the activities to be undertaken by the Company, as approved by the Board, may be accessed on the Company''s website at the link: https://www.vardhman. com/Document/Report/Company%20Information/ Policies/Vardhman%20Textiles%20Ltd/Corporate Social Responsibility Policy.pdf

During the year, the Company has spent H 1758 crore on CSR activities. Out of this, an amount of H 5.53 crore pertains to FY 2023-24.

The disclosures related to CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and form part of this report as Annexure II.

16. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR):

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandate the inclusion of the BRSR as part of the Annual Report for top 1000 listed entities based on market capitalization. In compliance with the Listing Regulations, BRSR is available on the Company''s website at the link: https://www.vardhman.com/Document/ Report/Compliances/BRR/Vardhman%20Textiles%20Ltd/ BRSR 2023-24.pdf

17. DIVIDEND DISTRIBUTION POLICY (DDP):

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the top 1,000 listed companies are required to formulate a DDF! Accordingly, a DDP was adopted to set out the parameters and circumstances that will be taken into account by the Board in recommending the distribution of dividend to its shareholders and/or retaining profits earned by the Company. The Policy is available on the Company''s website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Dividend Distribution Policy.pdf

18. RISK MANAGEMENT:

The Risk Management Policy required to be formulated under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has been duly formulated and approved by the Board of Directors of the Company. The aim of Risk Management Policy is to maximize opportunities in all activities and to minimize adversity. The Policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company.

The Risk Management Policy may be accessed on the Company''s website at the link: https://www. vardhman.com/Document/Report/Company%20 Information/Policies/Vardhman%20Textiles%20Ltd/Risk Management Policy.pdf

19. INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

A report on the Internal Financial Controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013, as given by the Statutory Auditors of the Company forms part of Independent Auditor''s Report on Standalone Financial Statements and Consolidated Financial Statements as Annexure A.

20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

All contracts/arrangements/transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: https://www.vardhman. com/Document/Report/Company%20Information/ Policies/Vardhman%20Textiles%20Ltd/Related Party Transaction Policy.pdf

Your Directors draw attention of the Members to Note 46 to the standalone financial statements which sets out related party disclosures.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 4, 5, 9 and 12 to the standalone financial statements).

22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major emphasis in our Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are annexed hereto and form part of this report as Annexure III.

23. ANNUAL RETURN:

In terms of Section 92(3) and 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company is available on the website of the Company at the link: www.vardhman.com

24. HUMAN RESOURCES /INDUSTRIAL RELATIONS:

Human resource is considered as the most valuable of all resources available to the Company. The Company continues to lay emphasis on building and sustaining an excellent organization climate based on human performance. The Management has been continuously endeavoring to build high performance culture on one hand and amiable work environment on the other hand. As on 31^st March, 2024, the Company employed around 24,929 employees on permanent rolls.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of the various plants.

25. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The disclosures in respect of managerial remuneration as required under section 197(12) read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are annexed hereto and forms part of this report.

A statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and forms part of this report.

In terms of section 197(14) of the Companies Act, 2013, the Company does not have any Holding Company. Further, none of the Director of the Company has received any remuneration or commission from any subsidiary company.

All the above details are provided in Annexure IV.

26. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this report.

27. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submit its Responsibility Statement:—

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures;

b. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2024 and of the profit of the Company for the year ended on 31^st March, 2024;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a going concern basis;

e. the Internal financial controls has been laid down to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. a proper system has been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

28. GENERAL DISCLOSURES:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Companies Act, 2013.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

4. Change in nature of Business of the Company.

5. No fraud has been reported by the Auditors to the Audit Committee or the Board.

6. There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

7 There was no instance of one time settlement with any Bank or Financial Institution.

Further, your Directors state that the Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and there was no case filed under the said Act.

29. VARDHMAN TEXTILES LIMITED EMPLOYEE STOCK OPTION PLAN:

• Vardhman Textiles Limited Employee Stock Option Plan 2016: The Company had granted Options to its eligible employees under ''Vardhman Textiles Limited Employee Stock Option Plan, 2016'' (hereinafter referred as the ESOP Plan). One Option entitled the holder to apply for one equity share of the Company in terms of the ESOP Plan. During the financial year 2023-24, 47750 equity shares were allotted to the eligible employees. So, the paid-up equity share capital of the Company stood increased to H 5783,49,600 as on 31^st March, 2024. Since, the exercise period of last tranche of vested Options has expired, so the Plan stood closed during the year.

The ESOP Plan of the Company was being implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution passed by the shareholders approving the said Plan. A certificate from the Secretarial Auditor of the Company in this regard would be available at the Annual General Meeting for the inspection by the Members.

The details as required to be disclosed are put on the Company''s website and may be accessed at https:// www.vardhman.com/Document/Report/Compliances/ Miscellaneous/Vardhman%20Textiles%20Ltd/ESOP Disclosure 2023-24.pdf

• Vardhman Textiles Limited Employee Stock Option Plan 2024: During the year, the Board of Directors of your Company in its meeting held on 24^th January, 2024 had approved ''Vardhman Textiles Limited Employee Stock Option Plan 2024''. The same has also been approved by the Members through Postal Ballot ended on 10^th March, 2024. The maximum no. of Options that can be granted under the Scheme are 34,70,097 (i.e. 1.20% of the no. of shares outstanding as on 31^st March, 2024). Further, the Nomination & Remuneration Committee of the Board of Directors of the Company in its meeting held on 3^rd April, 2024 has granted 31,75,000 Options to the eligible employees under this Plan. One Option entitles the holder to apply for one equity share of the Company.

30. NON-CONVERTIBLE DEBENTURES:

During the previous year, your Company had issued 15,000 Rated Listed Unsecured Redeemable Non-Convertible Debentures ("NCDs") of H 1,00,000 each aggregating to H 150.00 crore for cash at par on private placement basis, at

a coupon rate of 770% p.a. The NCDs were listed on the BSE Limited and were repayable on March 27 2024. The same has duly been redeemed on the said due date. So, there are no outstanding NCDs of the Company as on date.

31. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Bankers, Business Constituents and Shareholders for their continued and valuable co-operation and support to the Company and look forward to their continued support and co-operation in future too.

They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

FOR AND ON BEHALF OF THE BOARD

Place: Ludhiana (S.P. Oswal)

Dated: 9^th May, 2024 Chairman & Managing Director

---

Mar 31, 2023

The Directors of your Company have pleasure in presenting their 50^th Annual Report of the business and operations of the Company along with the Audited Financial Statements for the year ended 31^st March, 2023.

1. FINANCIAL RESULTS:

The financial performance of your Company for the year ended 31st March, 2023 is as under:-				(H in crore)
PARTICULARS	STANDALONE		CONSOLIDATED
	2022-23	2021-22	2022-23	2021-22
Revenue from operations (Net)	9,840.79	9,386.10	10,13749	9,622.34
Other Income	192.80	385.26	191.95	224.51
Profit before Depreciation, Interest & Tax	1,47785	2,64738	1,556.49	2,53792
(PBDIT)
Interest and Financial expenses	101.86	99.53	102.15	99.72
Profit before Depreciation and Tax (PBDT)	1,375.99	2,54785	1,454.34	2,438.20
Depreciation	388.95	362.10	394.43	36751
Profit before Tax (PBT)	98704	2,185.75	1,059.91	2,070.69
Provision for Tax - Current	224.98	521.03	235.96	52796
- Deferred Tax	12.99	(12.72)	19.20	(8.31)
Profit after tax (PAT)	749.07	1,67744	804.75	1,551.04
Other Comprehensive Income/ (Expense)	2.76	6.52	2.88	6.99
Total Comprehensive Income for the period	751.83	1,683.96	80763	1,558.03
Earnings per share (H)
- Basic	25.91	58.16	2796	54.58
- Diluted	25.90	58.00	2795	54.42

2. FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:

PRODUCTION & SALES REVIEW:

During the year under review, your Company has registered Revenue from Operations of H 9,840.79 crore as compared to H 9,386.10 crore in the previous year. The export of the Company (FOB value) decreased from H 4,523.80 crore to H 4,264.93 crore showing a decline of 5.72% over the previous year. The business wise performance is as under:-

a) Yarn:

The production of Yarn decreased from 2,38,065 MT to 2,33,314 MT during the year 2022-23.

b) Fabric:

During the year, the production of grey fabric decreased from 193 million meter to 182 million meter. The production of processed fabric decreased from 152 million meter to 141 million meter.

STANDALONE:

Profitability:

The Company earned profit before depreciation, interest and tax of H 1,47785 crore as against H 2,64738 crore in the previous year. After providing for depreciation of H 388.95 crore (Previous Year H 362.10 crore), interest of H 101.86 crore (Previous Year H 99.53 crore), provision for current tax of H 224.98 crore (Previous Year H 521.03 crore), deferred tax of H 12.99 crore (Previous Year H -12.72 crore), the net profit from operations after comprehensive income worked

out to H 751.83 crore as compared to H 1,683.96 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is H 6,70714 crore.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31^st March, 2023 was H 3,880.50 crore as compared to H 3,435.69 crore in the previous year.

b) Current Assets:

The current assets as on 31^st March, 2023 were H 5,558.14 crore as against H 5,61742 crore in the previous year. Inventory level was at H 2,312.16 crore as compared to the previous year level of H 2,806.67 crore.

CONSOLIDATED:

Profitability:

The Company earned profit before depreciation, interest and tax of H 1,556.49 crore as against H 2,53792 crore in the previous year. After providing for depreciation of H 394.43 crore (Previous Year H 36751 crore), interest of H 102.15 crore (Previous Year H 99.72 crore), provision for current tax of H 235.96 crore (Previous Year H 52796 crore), deferred tax of H 19.20 crore (Previous Year H -8.31 crore), the net profit from operations after comprehensive income worked out to H 80763 crore as compared to H 1,558.03 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is H 6,880.71 crore. Out of this, a sum of H 0.08 crore has been transferred to Statutory Reserve, a balance of H 6,880.63 crore is proposed to be carried as surplus to the Balance sheet.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31^st March, 2023 was H 3,934.97 crore as compared to H 3,491.56 crore in the previous year.

b) Current Assets:

The current assets as on 31^st March, 2023 were H 5,784.52 crore as against H 5,855.26 crore in the previous year. Inventory level was at H 2,392.68 crore as compared to the previous year level of H 2,882.29 crore.

FINANCIAL CONDITIONS & LIQUIDITY:

The Company enjoys a rating of "AA /Stable" from Credit Rating Information Services of India (CRISIL) for long term borrowings & "A1 " for short term borrowings and IND A1 for Commercial Papers from India Ratings and Research. Management believes that the Company''s liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:-

(H in crore)
PARTICULARS	2022-23	2021-22
Cash and Cash equivalents:
Beginning of the year	62.06	36.05
End of the year	74.66	62.06
Net cash provided (used) by:
Operating Activities	1,814.81	1,429.90
Investing Activities	(1,405.56)	(882.66)
Financing Activities	(396.65)	(521.23)

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

4. DIVIDEND:

The Board of Directors in its meeting held on 5^th May, 2023 has recommended dividend of H 3.5/- per share on the fully paid equity shares of the Company.

5. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules''), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government after the completion of seven years from the date of transfer to the Unpaid Dividend Account of the Company. The shareholders whose dividends have been transferred to the IEPF Authority can claim their dividend from the Authority. The unclaimed or unpaid dividend relating to the financial year 2015-16 was remitted

to Investor Education and Protection Fund established by the Central Government in the month of April, 2023.

Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more shall also be transferred to the IEPF Authority. The Company has sent notice to all shareholders whose shares are due to be transferred to the IEPF Authority and has also published requisite advertisement in the newspapers in this regard.

The details of these shares are also provided on the website of the Company at www.vardhman.com.

6. CONSOLIDATED FINANCIAL STATEMENT:

In accordance with Companies Act, 2013 & Indian Accounting Standards (Ind AS) 110 on ''Consolidated Financial Statements'' read with Ind AS 111 on ''Joint Arrangements'' and Ind AS 112 on ''Disclosure of Interest in other entities'', the Audited Consolidated Financial Statements are provided in the Annual Report.

7. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any material subsidiary. The details of the financials of the subsidiary and associate companies for the year 2022-23 are as follows:-

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged in the business of investment. The earnings of the Company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the financial year 2022-23, VTL recorded Revenue from operations of H

0.87 crore against H 25.52 crore in the previous year. The net profit of the Company worked out to H 0.39 crore as compared to H 19.93 crore during the previous year.

Vardhman Acrylics Limited (VAL)

This subsidiary of the Company is engaged in the business of manufacturing of Acrylic Fibre. Presently, the Company holds 70.74% shares in this subsidiary. During the financial year 2022-23, VAL recorded Revenue from operations of H 426.66 crore against H 303.33 crore in the previous year. The net profit of the Company after comprehensive income worked out to H 33.04 crore as compared to H 14.85 crore in the previous year.

Vardhman Yarns and Threads Limited (VYTL)

Vardhman Yarns and Threads Limited, Joint Venture with American & Efird Global, LLC (A&E), is an Associate of

the Company. It is engaged in the business of threads manufacturing and distribution. Presently, the Company holds 11% stake in VYTL. A&E is the second largest player in threads manufacturing and distribution across the world. During the year under review, the Revenue from operations was H 1,089.57 crore as against H 1,010.63 crore in the previous year showing an increase of 784%. The net profit for the year after comprehensive income worked out to H 142.12 crore as compared to H 132.62 crore during last year.

Vardhman Special Steels Limited (VSSL)

Vardhman Special Steels Limited is an Associate of the Company. The Company holds 23.90% shares of VSSL. The Revenue from operations of the Company was H 1,735.50 crore as compared to H 1,368.46 crore in the previous year. The net profit for the year after comprehensive income worked out to H 100.16 crore as compared to H 100.94 crore in the previous year.

Vardhman Spinning & General Mills Limited (VSGM)

Vardhman Spinning & General Mills Limited is an Associate of the Company. The Company holds 50% shares of VSGM. It is a trading company. However, during the year, the Company has not traded any goods. The Revenue from operations of the Company was H 0.06 lac as against H 0.42 lac in the previous year.

8. DIRECTORS:

Liable to retire by Rotation: In accordance with the provisions of the Articles of Association of the Company, Mrs. Suchita Jain, Director of the Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers herself for reappointment. The Board recommended her re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Appointment of Directors: During the year under review:

- Mr. Suresh Kumar was appointed as an Independent Director of the Company for a term of five (5) consecutive years w.e.f. 29^th September, 2022; and

- Ms. Sagrika Jain was appointed as an Executive Director of the Company for a term of three (3) years w.e.f. 6^th August, 2022.

Their appointments were further approved by the Members of the Company in the Annual General Meeting held on 30^th September, 2022.

Cessation from Directorship: During the year under review, Mr. A.K. Kundra and Dr. S.K. Bijlani, Independent Directors, ceased to be Directors of the Company w.e.f. 30^th September, 2022 on completion of their second term of appointment.

Declaration by Independent Directors:

The Independent Directors have submitted their disclosures to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof.

Your Board confirms that in its opinion the Independent Directors possess the requisite integrity, experience, expertise, proficiency and qualifications. All the Independent Directors on the Board of the Company are registered with the Indian Institute of Corporate Affairs, Manesar, Gurgaon (IICA) as notified by the Central Government under Section 150(1) of the Companies Act, 2013 and, if applicable, shall undergo online proficiency self-assessment test within the time prescribed by the IICA.

Familiarization programmes for Board Members:

Your Company has formulated Familiarization Programme for all the Board members in accordance with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Schedule IV of the Companies Act, 2013 which provides that the Company shall familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of Industry in which the Company operates, business model of the Company, etc. through various programs.

The Familiarization Programme for Board members may be accessed on the Company''s website at the link: https:// www.vardhman.com/Document/Report/Company%20 Information/Policies/Vardhman%20Textiles%20Ltd/ Familarisation Programme for Board Members.pdf

Annual Evaluation of the Board Performance:

The meeting of Independent Directors of the Company for the financial year 2022-23 was held on 30^th March, 2023 to evaluate the performance of Non-Independent Directors, Chairperson of the Company and the Board as a whole.

The evaluation was done by way of discussions on the performance of the Non- Independent Directors, Chairperson and Board as a whole.

A policy on the performance evaluation of Independent Directors, Board, Committees and other individual

Directors which includes criteria for performance evaluation of non-executive directors and executive directors has been formulated by the Company.

9. NOMINATION AND REMUNERATION POLICY:

In compliance with Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Policy of the Company has been duly approved and adopted by the Board pursuant to recommendations of Nomination and Remuneration Committee of the Company and may be accessed on the website of the Company at the link: https://www.vardhman. com/Document/Report/Company%20Information/ Policies/Vardhman%20Textiles%20Ltd/Nomination & Remuneration Policy.pdf As mandated by proviso to Section 178(4) of the Companies Act, 2013, salient features of Nomination and Remuneration Policy are as under:

a) Identifying persons who are qualified to become Directors and who may be appointed in Senior Management in accordance with the criteria laid down and recommending to the Board their appointment and removal.

b) Formulating the criteria for determining qualifications, positive attributes and independence of a Director and evaluating the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an independent director.

c) Recommending to the Board, policy relating to remuneration of Directors (Whole time Directors, Executive Directors etc.), Key Managerial Personnel and other employees while ensuring the following:

i. That the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully.

ii. That relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

iii. That remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate of the working of the Company and its goals.

d) Formulating the criteria for evaluating performance of Board and all the Directors.

e) Devising a policy on diversification of Board.

f) Determining whether to extend or continue the term of appointment of the independent director on the basis of the report of performance evaluation of independent directors.

g) Recommending to the Board remuneration payable to senior management.

10. KEY MANAGERIAL PERSONNEL (KMP):

In compliance with provisions of Section 203 of the

Companies Act, 2013, following are the KMPs of the

Company as on 31^st March, 2023:

S. No.	Name	Designation
1.	S.P Oswal	Chairman & Managing Director
2.	Rajeev Thapar	Chief Financial Officer
3.	Sanjay Gupta	Company Secretary

11. NUMBER OF BOARD MEETINGS:

During the year under review, the Board met Six (6) times and the intervening gap between any two meetings was within the period prescribed under Companies Act, 2013. The details of Board Meeting are set out in Corporate Governance Report which forms part of this Annual Report.

12. AUDITORS AND AUDITORS'' REPORT:

Statutory Auditors:

M/s Deloitte Haskins & Sells, LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) (''Deloitte'') were re-appointed as Statutory Auditors of the Company for a second consecutive term of 5 years at the 49^th Annual General Meeting of the Company held on 30^th September, 2022.

Further, the Statutory Auditors of the Company have submitted Auditors'' Report on the accounts of the Company for the accounting year ended 31^st March, 2023.

This Auditors'' Report is self-explanatory and requires no comments.

Secretarial Auditor:

M/s. Ashok K Singla & Associates, Company Secretary in Practice, were appointed as Secretarial Auditors of

the Company by the Board of Directors of the Company in its meeting held on 21^st May, 2022 for the financial year 2022-23.

The Secretarial Auditors of the Company have submitted their Report in Form No. MR-3 as required under Section 204 of the Companies Act, 2013 for the financial year ended 31^st March, 2023. This Report is self-explanatory and requires no comments. The Report forms part of this report as Annexure I.

Cost Auditor:

The Company is maintaining the Cost Records, as specified by the Central Government under section 148(1) of Companies Act, 2013.

The Board of Directors has appointed M/s. Ramanath Iyer & Company, Cost Accountants, New Delhi, as the Cost Auditors of the Company to conduct Cost Audit of the Accounts for the financial year ended 2023-24. However, as per the provisions of Section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014, the remuneration to be paid to the Cost Auditors is subject to ratification by Members at the Annual General Meeting. Accordingly, the remuneration to be paid to M/s. Ramanath Iyer & Company, Cost Accountants, New Delhi, for financial year 2023-24 is placed for ratification by the Members.

13. AUDIT COMMITTEE & VIGIL MECHANISM:

Composition of Audit Committee:

The Audit Committee consists of Mr. Prafull Anubhai, Mr. Suresh Kumar and Mrs. Harpreet Kaur Kang, Independent Directors. Mr. Prafull Anubhai is the Chairman of the Committee and Company Secretary of the Company is the Secretary of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism:

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013, the Company has established a "Vigil Mechanism" incorporating Whistle Blower Policy in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for employees and Directors of the Company, for expressing the genuine concerns of unethical behavior, actual or suspected fraud or violation of the codes of conduct by way of direct access to the Chairman/ Chairman of the Audit Committee.

The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns.

The Policy on Vigil Mechanism and Whistle Blower Policy as approved by the Board may be accessed on the Company''s website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Whistle Blower Policy.pdf

14. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. Corporate Governance is about maximizing shareholder value legally, ethically and sustainably. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Practising Company Secretary of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the report on Corporate Governance.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Vision & Core areas of CSR: Your Company is committed to and fully aware of its CSR, the guidelines in respect of which were more clearly laid down in the Companies Act, 2013. The Company''s vision on CSR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for a quality value addition and constructive contribution in building a healthy and better society through its CSR related initiatives and focus on education, environment, health care and other social causes.

CSR Policy: The CSR Policy of the Company indicating the activities to be undertaken by the Company, as approved by the Board, may be accessed on the Company''s website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Corporate Social Responsibility Policy.pdf

During the year, the Company has spent H 1,799.66 lac on CSR activities. Out of this, an amount of H 430.58 lac pertains to FY 2022-23.

The disclosures related to CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and form part of this report as Annexure II.

16. BUSINESS RESPONSIBILITY ANDSUSTAINABILITY REPORT (BRSR):

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandate the inclusion of the BRSR as

part of the Annual Report for top 1000 listed entities based on market capitalization. In compliance with the Listing Regulations, we have integrated BRSR disclosure in our Annual Report.

17. DIVIDEND DISTRIBUTION POLICY (DDP):

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the top 1,000 listed companies are required to formulate a DDF! Accordingly, a DDP was adopted to set out the parameters and circumstances that will be taken into account by the Board in recommending the distribution of dividend to its shareholders and/or retaining profits earned by the Company. The Policy is available on the Company''s website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Dividend Distribution Policy.pdf

18. RISK MANAGEMENT:

The Risk Management Policy required to be formulated under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has been duly formulated and approved by the Board of Directors of the Company. The aim of Risk Management Policy is to maximize opportunities in all activities and to minimize adversity. The policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company.

The Risk Management policy may be accessed on the Company''s website at the link: https://www.vardhman. com/Document/Report/Company%20Information/Policies/ Vardhman%20Textiles%20Ltd/Risk Management Policy. pdf

19. INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

A report on the Internal Financial Controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 as given by the Statutory Auditors of the Company forms part of Independent Auditor''s Report on Standalone Financial Statements and Consolidated Financial Statements as Annexure A.

20. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

All contracts/arrangements/transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Related Party Transaction Policy.pdf

Your Directors draw attention of the Members to Note 46 to the standalone financial statement which sets out related party disclosures.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 4, 5, 9 and 12 to the standalone financial statement).

22. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major emphasis in our Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are annexed hereto and form part of this report as Annexure III.

23. ANNUAL RETURN:

In terms of Section 92(3) and 134(3)(a) of the Companies Act, 2013 the Annual Return of the Company is available on the website of the Company at the link: www.vardhman. com

24. HUMAN RESOURCES /INDUSTRIAL RELATIONS:

Human resource is considered as the most valuable of all resources available to the Company.The Company continues to lay emphasis on building and sustaining an excellent organization climate based on human performance. The Management has been continuously endeavoring to build high performance culture on one hand and amiable work environment on the other hand. As on 31^st March, 2023, the Company employed around 28,283 employees on permanent rolls.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of the various plants.

25. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The disclosures in respect of managerial remuneration as required under section 197(12) read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and form part of this report.

A statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and forms part of this report.

In terms of section 197(14) of the Companies Act, 2013, the Company does not have any Holding Company. Further, none of the Director of the Company has received any remuneration or commission from any subsidiary company.

All the above details are provided in Annexure IV.

26. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.

27. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to provisions of Section 134 (5) of the Companies Act, 2013 the Board hereby submit its Responsibility Statement:—

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures;

b. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2023 and of the profit of the Company for the year ended on 31^st March, 2023;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a going concern basis;

e. the Internal financial controls has been laid down to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. a proper system has been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

28. GENERAL DISCLOSURES:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

4. Change in nature of Business of Company.

5. No fraud has been reported by the Auditors to the Audit Committee or the Board.

6. There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

7 There was no instance of one time settlement with any Bank or Financial Institution.

Further, your Directors state that the Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and there was no case filed under the said Act.

29. VARDHMAN TEXTILES LIMITED EMPLOYEE STOCK OPTION PLAN, 2016:

The Company has granted options to its employees under Vardhman Textiles Limited Employee Stock Options Plan, 2016 (hereinafter referred as ESOP Plan). As per the terms of the ESOP Plan, the Company can grant a maximum of 31,82,590 options of face value of H 2/- each to eligible employees from time to time. During the financial year 2022-23, 2,63,000 equity shares of face value of H 2/- each were allotted to the eligible employees. So, the paid up equity share capital of the Company stood increased to H 5782,54,100 as on 31^st March, 2023.

The ESOP Plan of the Company is being implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution passed by the shareholders approving the said plan. A certificate from the Secretarial Auditor of the Company in this regard would be available at the Annual General Meeting for the inspection by the Members.

The details as required to be disclosed are put on the Company''s website and may be accessed at https:// www.vardhman.com/Document/Report/Compliances/ Miscellaneous/Vardhman%20Textiles%20Ltd/ESOP Disclosure 2022-23.pdf

30. NON-CONVERTIBLE DEBENTURES:

During the year, your Company has issued 15,000 Rated Listed Unsecured Redeemable Non-Convertible Debentures (''NCDs") of H 1,00,000 each aggregating to H 150.00 crore for cash at par on private placement basis, at a coupon rate of 7.70% p.a. The NCD''s are listed at the Bombay Stock Exchange of India (BSE) and are repayable on March 27 2024.

31. ACQUISITION OF STAKE IN RENEW GREEN (MPR ONE) PRIVATE LIMITED:

During the year, your Company has entered into a ''Share Subscription and Shareholder''s Agreement'' with ReNew Green Energy Solutions Private Limited (Promotor) and ReNew Green (MPR One) Private Limited (Power Producer) along with a ''Power Purchase Agreement'' with Renew Green (MPR One) Private Limited (Power Producer). The purpose of entering into the Agreements is to set-up a 11.5 MW Wind-Solar Hybrid Power Plant in the state of Madhya Pradesh wherein the power generated will be supplied exclusively to your Company under the Captive Rules. Your Company will acquire 31.2% stake in ReNew Green (MPR One) Private Limited.

32. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Bankers, Business Constituents and Shareholders for their continued and valuable cooperation and support to the Company and look forward to their continued support and co-operation in future too.

They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

FOR AND ON BEHALF OF THE BOARD

Place : Ludhiana (S.P Oswal)

Dated : 5^th May, 2023 Chairman & Managing Director

---

Mar 31, 2022

The Directors of your Company have pleasure in presenting their 49^th Annual Report of the business and operations of the Company along with the Audited Financial Statements for the year ended 31^st March, 2022.

1. FINANCIAL RESULTS:

The financial performance of your Company for the year ended 31^st March, 2022 is as under:-

(Hin crore)

PARTICULARS	STANDALONE		CONSOLIDATED
	2021-22	2020-21	2021-22	2020-21
Revenue from Operations (Net)	9,386.10	5,926.23	9,622.34	6,139.87
Other Income	385.26	188.16	224.51	201.56
Profit before Depreciation, Interest & Tax (PBDIT)	2,64738	955.23	2,538.11	1,036.03
Interest and Financial expenses	99.53	112.78	99.72	113.32
Profit before Depreciation and Tax (PBDT)	2,54785	842.45	2,438.39	922.71
Depreciation	362.10	358.39	36751	363.81
Profit before Tax (PBT)	2,185.75	484.06	2,070.88	558.90
Provision for Tax - Current	521.03	103.49	52796	118.75
- Deferred Tax	(12.72)	13.83	(8.31)	13.24
Profit after tax (PAT)	1,67744	366.74	1,551.23	426.91
Other Comprehensive Income/ (Expense)	6.52	4.72	6.80	4.75
Total Comprehensive Income for the period Earnings per share (H)	1,683.96	371.46	1,558.03	431.66
- Basic	58.16	12.75	54.58	14.67
- Diluted	58.00	12.67	54.42	14.56

2. FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:

PRODUCTION & SALES REVIEW:

During the year under review, your Company has registered Revenue from Operations of H9,386.10 crore as compared to H5,926.23 crore in the previous year. The export of the Company (FOB value) increased from H2,784.86 crore to H4,523.80 crore showing an increase of 62.44% over the previous year. The business wise performance is as under:-

a) Yarn:

The production of Yarn increased from 2,11,343 MT to 2,38,638 MT during the year 2021-22.

b) Fabric:

During the year, the production of grey fabric increased from 155 million meter to 193 million meter. The production of processed fabric increased from 100 million meter to 152 million meter.

STANDALONE:

Profitability:

The Company earned profit before depreciation, interest and tax of H2,64738 crore as against H955.23 crore in the previous year. After providing for depreciation of H362.10 crore (Previous Year H358.39 crore), interest of H99.53 crore (Previous Year H112.78 crore), provision for current tax of

H521.03 crore (Previous Year H103.49 crore), deferred tax of H(12.72) crore (Previous Year H13.83 crore), the net profit from operations after comprehensive income worked out to H1,683.96 crore as compared to H371.46 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is H5,955.44 crore.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31^st March, 2022 was H3,435.69 crore as compared to H3,46795 crore in the previous year.

b) Current Assets:

The current assets as on 31^st March, 2022 were H5,617.42 crore as against H4,783.41 crore in the previous year. Inventory level was at H2,806.67 crore as compared to the previous year level of H2,735.59 crore.

CONSOLIDATED:

Profitability:

The Company earned profit before depreciation, interest and tax of H2,538.11 crore as against H1,036.03 crore in the previous year. After providing for depreciation of H367.51 crore (Previous Year H363.81 crore), interest of H99.72 crore (Previous Year H113.32 crore), provision for current tax of H52796 crore (Previous Year H118.75 crore), deferred tax of H(8.31) crore (Previous Year H13.24 crore), the net profit from operations after comprehensive income worked out to H1,558.03 crore as compared to H431.66 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is H6,028.39 crore. Out of this, a sum of H3.99 crore has been transferred to Statutory Reserve, a balance of H6,024.40 crore is proposed to be carried as surplus to the Balance sheet.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31^st March, 2022 was H3,491.56 crore as compared to H3,526.57 crore in the previous year.

b) Current Assets:

The current assets as on 31^st March, 2022 were H5,855.26 crore as against H5,202.21 crore in the

previous year. Inventory level was at H2,882.29 crore as compared to the previous year level of H2,796.05 crore.

FINANCIAL CONDITIONS & LIQUIDITY:

The Company enjoys a rating of "AA /Stable" from Credit Rating Information Services of India (CRISIL) for long term borrowings and "A1 " for short term borrowings. Management believes that the Company''s liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:-

(H in crore)
PARTICULARS	2021-22	2020-21
Cash and Cash equivalents:
Beginning of the year	36.05	150.53
End of the year	62.06	36.05
Net cash provided (used) by:
Operating Activities	1,429.90	115.40
Investing Activities	(882.66)	(31.09)
Financing Activities	(521.23)	(198.79)

3. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

4. DIVIDEND:

During the year under review, the Board of Directors in its meeting held on 27^th October, 2021 declared an interim dividend of H34/- per share on the fully paid equity shares of the Company.

5. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules''), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government after the completion of seven years from the date of transfer to the Unpaid Dividend Account of

the Company. The shareholders whose dividends have been transferred to the IEPF Authority can claim their dividend from the Authority. The unclaimed or unpaid dividend relating to the financial year 2014-15 is due for remittance in the month of October, 2022 to Investor Education and Protection Fund established by the Central Government.

Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more shall also be transferred to the IEPF Authority. The Company has sent notice to all shareholders whose shares are due to be transferred to the IEPF Authority and has also published requisite advertisement in the newspapers in this regard.

The details of these shares are also provided on the website of the Company at www.vardhman.com.

6. CONSOLIDATED FINANCIAL STATEMENT:

In accordance with Companies Act, 2013 & Indian Accounting Standards (Ind AS) 110 on ''Consolidated Financial Statements'' read with Ind AS 111 on ''Joint Arrangements'' and Ind AS 112 on ''Disclosure of Interest in other entities'', the Audited Consolidated Financial Statements are provided in the Annual Report.

7. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have any material subsidiary. subsidiary. During the year, Vardhman Nisshinbo Garments Company Limited and VMT Spinning Company Limited, wholly owned subsidiaries of the Company, got merged with the Company and as such ceased to be subsidiaries of the Company. The details of the financials of the subsidiary and associate companies for the year 2021-22 are as follows:-

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged in the business of investment. The earnings of the Company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the financial year 2021-22, VTL recorded Revenue from operations of H25.52 crore against H4.07 crore in the previous year. The net profit of the Company worked out to H19.93 crore as compared to H3.31 crore during the previous year.

Vardhman Acrylics Limited (VAL)

This subsidiary of the Company is engaged in the business of manufacturing of Acrylic Fibre. Presently, the Company holds 70.74% shares in this subsidiary. During the financial year 2021-22, VAL recorded Revenue from operations of H303.33 crore against H280.19 crore in the previous year. The net profit of the Company after comprehensive income worked out to H14.85 crore as compared to H42.94 crore in the previous year.

Vardhman Yarns and Threads Limited (VYTL)

Vardhman Yarns and Threads Limited, Joint Venture with American & Efird Global, LLC (A&E), is an Associate of the Company. It is engaged in the business of threads manufacturing and distribution. Presently, the Company holds 11% stake in VYTL. A&E is the second largest player in threads manufacturing and distribution across the world. During the year under review, the Revenue from operations was H1,010.63 crore as against H 703.77 crore in the previous year showing an increase of 43.60%. The net profit for the year after comprehensive income worked out to H 132.62 crore as compared to H 86.06 crore during last year.

Vardhman Special Steels Limited (VSSL)

Vardhman Special Steels Limited is an Associate of the Company. The Company holds 23.94% shares of VSSL. The Revenue from operations of the Company was H1,368.46 crore as compared to H93708 crore in the previous year. The net profit for the year after comprehensive income worked out to H100.94 crore as compared to H44.82 crore in the previous year.

Vardhman Spinning & General Mills Limited (VSGM)

Vardhman Spinning & General Mills Limited is an Associate of the Company. The Company holds 50% shares of VSGM. It is a trading company. However, during the year, the Company has not traded any goods. The Revenue from operations of the Company was H0.42 lac as against H0.99 lac in the previous year.

8. DIRECTORS:

Liable to retire by Rotation: In accordance with the provisions of the Articles of Association of the Company, Mr. Neeraj Jain, Director of the Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers himself for reappointment. The Board recommended his re-appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Independent Director: The Board of Director in its meeting held on 22^nd January, 2022 had appointed Mr. Udeypaul Singh Gill as an Additional Director (Independent) on the Board of the Company for a term of three (3) consecutive years w.e.f. 22^nd January, 2022. His appointment as an Independent Director was further approved by the Members of the Company vide their resolution passed by Postal Ballot dated 11^th March, 2022.

Declaration by Independent Directors:

The Independent Directors have submitted their disclosures to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof.

Your Board confirms that in its opinion the Independent Directors possess the requisite integrity, experience, expertise, proficiency and qualifications. All the Independent Directors on the Board of the Company are registered with the Indian Institute of Corporate Affairs, Manesar, Gurgaon (IICA) as notified by the Central Government under Section 150(1) of the Companies Act, 2013 and, if applicable, shall undergo online proficiency self-assessment test within the time prescribed by the IICA.

Company''s Policy relating to Directors appointment, payment of remuneration and discharge of their duties:

The Nomination & Remuneration Committee of the Company has formulated the ''Nomination & Remuneration Policy'' on Director''s appointment and remuneration which includes the criteria for determining qualifications, positive attributes, independence of a director and other matters as provided under Section 178(3) of the Companies Act, 2013.

The Nomination & Remuneration Policy is annexed hereto and forms part of this Report as Annexure I.

Familiarization programmes for Board Members:

Your Company has formulated Familiarization Programme for all the Board members in accordance with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Schedule IV of the Companies Act, 2013 which provides that the Company shall familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of Industry in which the Company operates, business model of the Company, etc. through various programs.

The Familiarization Programme for Board members may be accessed on the Company''s website at the link:

https://www.vardhman.com/Document/Report/ Company%20Information/Policies/Vardhman%20T extiles%20Ltd/Familarisation Programme for Board Members.pdf

Annual Evaluation of the Board Performance:

The meeting of Independent Directors of the Company for the financial year 2021-22 was held on 29^th March, 2022, to evaluate the performance of Non-Independent Directors, Chairperson of the Company and the Board as a whole.

The evaluation was done by way of discussions on the performance of the Non- Independent Directors, Chairperson and Board as a whole.

A policy on the performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of non-executive directors and executive directors has been formulated by the Company.

9. KEY MANAGERIAL PERSONNEL (KMP):

In compliance with provisions of Section 203 of the Companies Act, 2013, following are the KMPs of the Company as on 31^st March, 2022:

S. No.	Name	Designation
1.	S.P Oswal	Chairman & Managing Director
2.	Rajeev Thapar	Chief Financial Officer
3.	Sanjay Gupta	Company Secretary

10. NUMBER OF BOARD MEETINGS:

During the year under review, the Board met Seven (7) times and the intervening gap between any two meetings was within the period prescribed under Companies Act, 2013. The details of Board Meeting are set out in Corporate Governance Report which forms part of this Annual Report.

11. AUDITORS AND AUDITORS'' REPORT:

Statutory Auditors:

M/s Deloitte Haskins & Sells, LLP Chartered Accountants (Firm Registration No. 117366W/W-100018) (''Deloitte'') were appointed as Statutory Auditors of the Company for a term of 5 years at the 44th Annual General Meeting of the Company held on 22^nd September, 2017 Since, their term is expiring at the ensuing Annual General Meeting, the

Board of Directors in its meeting held on 21^st May, 2022, has approved and recommended to the Shareholders the re-appointment of M/s Deloitte Haskins & Sells, LLP as the Statutory Auditors of the Company for a second consecutive term of 5 years starting from the conclusion of 49^th Annual General Meeting till the conclusion of 54^th Annual General Meeting. The said re-appointment is subject to approval by the Members of the Company.

Further, the Statutory Auditors of the Company have submitted Auditors'' Report on the accounts of the Company for the accounting year ended 31^st March, 2022.

This Auditors'' Report is self-explanatory and requires no comments.

Secretarial Auditor:

M/s. Ashok K Singla & Associates, Company Secretary in Practice, were appointed as Secretarial Auditors of the Company by the Board of Directors of the Company in its meeting held on 25^th May, 2021 for the financial year 2021-22.

The Secretarial Auditors of the Company have submitted their Report in Form No. MR-3 as required under Section 204 of the Companies Act, 2013 for the financial year ended 31^st March, 2022. This Report is self-explanatory and requires no comments. The Report forms part of this report as Annexure II.

Cost Auditor:

The Company is maintaining the Cost Records, as specified by the Central Government under section 148(1) of Companies Act, 2013.

The Board of Directors has appointed M/s. Ramanath Iyer & Company, Cost Accountants, New Delhi, as the Cost Auditors of the Company to conduct Cost Audit of the Accounts for the financial year ended 2022-23. However, as per the provisions of Section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014, the remuneration to be paid to the Cost Auditors is subject to ratification by Members at the Annual General Meeting. Accordingly, the remuneration to be paid to M/s. Ramanath Iyer & Company, Cost Accountants, New Delhi, for financial year 2022-23 is placed for ratification by the Members.

12. AUDIT COMMITTEE & VIGIL MECHANISM:

Composition of Audit Committee:

The Audit Committee consists of Mr. Prafull Anubhai, Dr. S.K. Bijlani and Mr. A.K. Kundra, Independent Directors.

Mr. Prafull Anubhai is the Chairman of the Committee and Company Secretary of the Company is the Secretary of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism:

Pursuant to the provisions of Section 177(9) of the Companies Act, 2013, the Company has established a "Vigil Mechanism" incorporating Whistle Blower Policy in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for employees and Directors of the Company, for expressing the genuine concerns of unethical behavior, actual or suspected fraud or violation of the codes of conduct by way of direct access to the Chairman/ Chairman of the Audit Committee.

The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns.

The Policy on Vigil Mechanism and Whistle Blower Policy as approved by the Board may be accessed on the Company''s website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Whistle Blower Policy.pdf

13. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. Corporate Governance is about maximizing shareholder value legally, ethically and sustainably. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Practising Company Secretary of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the report on Corporate Governance.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR):

Vision & Core areas of CSR: Your Company is committed to and fully aware of its CSR, the guidelines in respect of which were more clearly laid down in the Companies Act, 2013. The Company''s vision on CSR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for a quality value addition and constructive contribution in building a healthy and better society through its CSR related initiatives and focus on education, environment, health care and other social causes.

CSR Policy: The CSR Policy of the Company indicating the activities to be undertaken by the Company, as approved

by the Board, may be accessed on the Company''s website at the link: https://www.vardhman.com/Document/

Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Corporate Social Responsibility Policy.pdf

During the year, the Company has spent H20.09 crore on CSR activities. Out of this, an amount of H3.06 crore pertains to FY 2021-22.

The disclosures related to CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and form part of this report as Annexure III.

15. BUSINESS RESPONSIBILITY REPORT (BRR):

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandate the inclusion of the BRR as part of the Annual Report for top 1000 listed entities based on market capitalization. In compliance with the Listing Regulations, we have integrated BRR disclosure in our Annual Report.

16. DIVIDEND DISTRIBUTION POLICY (DDP):

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the top 1,000 listed companies are required to formulate a DDF! Accordingly, a DDP was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining profits earned by the Company. The Policy is available on the Company''s website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Dividend Distribution Policy.pdf

17. RISK MANAGEMENT:

The Risk Management Policy required to be formulated under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has been duly formulated and approved by the Board of Directors of the Company. The aim of Risk Management Policy is to maximize opportunities in all activities and to minimize adversity. The policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company.

The Risk Management policy may be accessed on the Company''s website at the link: https://www.vardhman.

com/Document/Report/Company%20Information/Policies/ Vardhman%20Textiles%20Ltd/Risk Management Policy.pdf

18. INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

A report on the Internal Financial Controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 as given by the Statutory Auditors of the Company forms part of Independent Auditor''s Report on Standalone Financial Statements and Consolidated Financial Statements as

Annexure A.

19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

All contracts/arrangements/transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: https://www.vardhman.com/Document/ Report/Company%20Information/Policies/Vardhman%20 Textiles%20Ltd/Related Party Transaction Policy.pdf

Your Directors draw attention of the Members to Note 46 to the standalone financial statement which sets out related party disclosures.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 4, 5, 9 and 12 to the standalone financial statement).

21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major emphasis in our Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are annexed hereto and form part of this report as Annexure IV.

22. ANNUAL RETURN:

In terms of Section 92(3) and 134(3)(a) of the Companies Act,

2013 the Annual Return of the Company is available on the website of the Company at the link: www.vardhman.com

23. HUMAN RESOURCES /INDUSTRIAL RELATIONS:

Human resource is considered as the most valuable of all resources available to the Company. The Company continues to lay emphasis on building and sustaining an excellent organization climate based on human performance. The Management has been continuously endeavoring to build high performance culture on one hand and amiable work environment on the other hand. As on 31^st March, 2022, the Company employed around 27599 employees on permanent rolls.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of the various plants.

24. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The disclosures in respect of managerial remuneration as required under section 197(12) read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules,

2014 is annexed hereto and form part of this report.

A statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5(2) and 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and forms part of this report.

In terms of section 197(14) of the Companies Act, 2013, the Company does not have any Holding Company. Further, none of the Director of the Company has received any remuneration or commission from any subsidiary company.

All the above details are provided in Annexure V.

25. MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.

26. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to provisions of Section 134 (5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:—

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures;

b. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2022 and of the profit of the Company for the year ended on 31^st March, 2022;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a going concern basis;

e. the Internal financial controls has been laid down to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. a proper system has been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

27. GENERAL DISCLOSURES:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

4. Change in nature of Business of Company.

5. No fraud has been reported by the Auditors to the Audit Committee or the Board.

6. There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

7 There was no instance of one time settlement with any Bank or Financial Institution.

Further, your Directors state that the Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and there was no case filed under the said Act.

28. VARDHMAN TEXTILES LIMITED EMPLOYEE STOCK OPTION PLAN, 2016:

The Company has granted options to its employees under Vardhman Textiles Limited Employee Stock Options Plan, 2016 (hereinafter referred as ESOP Plan). As per the terms of the ESOP Plan, the Company can grant a maximum of 6,36,518 options of face value of H10/- each to eligible employees from time to time. One option entitles the holder to apply for one equity share of H10/- each of the Company in terms of the Plan. During, the financial year 2021-22, 2,10,250 equity shares of face value of H10/- each were allotted to the eligible employees. So, the paid up equity share capital of the Company stood increased to H57,7728,100 as on 31^st March, 2022.

The ESOP Plan of the Company is being implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution passed by the shareholders approving the said plan. A certificate from the Secretarial Auditor of the Company in this regard would be available at the Annual General Meeting for the inspection by the Members.

The details as required to be disclosed are put on the Company''s website and may be accessed at https:// www.vardhman.com/Document/Report/Compliances/ Miscellaneous/Vardhman%20Textiles%20Ltd/ESOP Disclosure 2021-22.pdf

29. SPLIT/ SUB-DIVISION:

During the year, pursuant to the approval of the shareholders through their Postal Ballot dated 11^th March, 2022, the equity shares of the Company were sub-divided from existing face value of H10/- per equity shares into 5 equity shares having face value of H2 per equity share. The Record Date for effecting this sub-division of equity share was 26^th March, 2022.

30. MERGER OF VMT SPINNING COMPANYLIMITED AND VARDHMAN NISSHINBOGARMENTS COMPANY LIMITED WITH THE COMPANY:

During the year, the National Company Law Tribunal (NCLT), Chandigarh vide its Orders dated 30^th March, 2022 has sanctioned the Scheme of Amalgamation of VMT Spinning Company Limited (VMT) and Vardhman Nisshinbo Garments Company Limited (VNGL) with the Company. Both VMT and VNGL were wholly owned subsidiaries of the Company and their merger has become effective from the Appointed Date as mentioned in the Scheme of Amalgamation i.e. 1^st April, 2020.

31. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Bankers, Business Constituents and Shareholders for their continued and valuable co-operation and support to the Company and look forward to their continued support and co-operation in future too.

They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

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Mar 31, 2018

DIRECTORS’ REPORT

Dear Members,

The Directors of your Company have pleasure in presenting their 45th Annual Report of the business and operations of the Company along with the Audited Financial Statements for the year ended, 31st March, 2018.

1. Financial Results:

The financial performance of your Company for the year ended 31st March, 2018 is as under:-

(RS, in crore)

Particulars	STANDALONE		CONSOLIDATED
	2017-18	2016-17	2017-18	2016-17
Revenue from operations (Net)	5,851.37	5,690.95	6,248.27	6,029.95
Other Income	185.06	628.36	197.35	553.86
Profit before Depreciation, Interest & Tax (PBDIT)	1,043.62	1,759.43	1,117.82	1,790.02
Interest and Financial expenses	114.32	125.13	118.19	128.68
Profit before Depreciation and Tax (PBDT)	929.30	1,634.3	999.63	1,661.34
Depreciation	228.55	329.49	240.00	343.40
Profit before Tax (PBT)	700.75	1,304.81	759.63	1,317.94
Provision for Tax - Current	147.58	281.57	165.01	302.64
- Deferred Tax (Net of Adjustment)	7.41	21.65	2.18	21.03
Profit after tax (PAT)	545.76	1,001.59	592.44	994.27
Other Comprehensive Income	1.70	(0.22)	1.60	(0.45)
Total Comprehensive Income for the period	547.46	1,001.37	594.04	993.82
Earnings per share (H)
- Basic	96.41	163.67	106.56	163.11
- Diluted	95.45	163.67	105.48	163.11

2. Financial Analysis and Review of Operations: Production & Sales Review:

During the year under review, your Company has registered Revenue from Operations of RS, 5,851.37 crore as compared to RS, 5,690.95 crore in the previous year. The export of the Company increased from RS, 2,206.90 crore to RS, 2,211.43 crore showing an increase of 0.21 % over the previous year. The product wise performance is as under:-

a) Yarn:

The production of Yarn increased marginally from 2,02,770 MT to 2,04,091 MT during the year 2017-18.

b) Fabric:

During the year, the production of grey fabric remained same as last year i.e. 175 million meter. The production of processed fabric increased from 116 million meter to 122 million meter.

Profitability:

The Company earned profit before depreciation, interest and tax of RS, 1,043.62 crore as against RS, 1,759.43 crore in the previous year. After providing for depreciation of RS, 228.55 crore (previous year RS, 329.49 crore), interest of RS, 114.32 crore (previous year RS, 125.13 crore), provision for current tax of RS, 147.58 crore (previous year RS, 281.57 crore), deferred tax (net of adjustments) of RS, 7.41 crore (previous year RS, 21.65 crore), the Net Profit after comprehensive income worked out to RS, 547.46 crore as compared to RS, 1,001.37 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is RS, 3,095.17 crore. Out of this, a sum of RS, 86.09 crore and RS, 15.79 crore has been utilized towards dividend and corporate dividend tax thereon respectively and an amount RS, 17.81 crore has been transferred to Debenture Redemption Reserve. After adding a sum of

RS, 2.19 crore on account of dividend received on shares held through Trust and a sum of RS, 180.81 crore on account of profit on sale of shares held through Trust, a balance of RS, 3,158.48 crore is proposed to be carried as surplus to the balance sheet.

Resources Utilization:

a) Fixed Assets:

The Net Block as at 31st March, 2018 was RS, 2,506.77 crore as compared to RS, 2,458.15 crore in the previous year.

b) Current Assets:

The current assets as on 31st March, 2018 were RS, 4,201.33 crore as against RS, 3,411.26 crore in the previous year. Inventory level was at RS, 2,116.51 crore as compared to the previous year level of RS, 1,589.00 crore.

CONSOLIDATED:

Profitability:

The Company earned profit before depreciation, interest and tax of RS, 1,117.82 crore as against RS, 1,790.02 crore in the previous year. After providing for depreciation of RS, 240.00 crore (previous year RS, 343.40 crore), interest of RS, 118.19 crore (previous year RS, 128.68 crore), provision for current tax of RS, 165.01 crore (previous year RS, 302.64 crore), deferred tax (net of adjustments) of RS, 2.18 crore (previous year RS, 21.03 crore), the net profit from operations after comprehensive income worked out to RS, 594.04 crore as compared to RS, 993.82 crore in the previous year.

The balance available for appropriation after adding balance in surplus account is RS, 3,288.39 crore. Out of this, a sum of RS, 84.56 crore and RS, 18.24 crore has been utilized towards dividend and corporate dividend tax thereon respectively, an amount RS, 17.81 crore and 2.05 crore has been transferred to Debenture Redemption Reserve and Statutory Reserve respectively. After adding a sum of RS, 2.19 crore on account of dividend received on shares held through Trust and a sum of RS, 180.77 crore on account of profit on sale of shares held through Trust, a balance of RS, 3,348.69 crore is proposed to be carried as surplus to the balance sheet.

Resources Utilization:

a) Fixed Assets:

The Net Block as at 31st March, 2018 was RS, 2,618.40 crore as compared to RS, 2,578.05 crore in the previous year.

b) Current Assets:

The current assets as on 31st March, 2018 were RS, 4,545.60 crore as against RS, 3,838.40 crore in the previous year. Inventory level was at RS, 2,256.64 crore as compared to the previous year level of RS, 1,752.81 crore.

Financial Conditions & Liquidity:

The Company enjoys a rating of “AA /Stable" from Credit Rating Information Services of India (CRISIL) for long term borrowings and “A1 " for short term borrowings respectively. Management believes that the Company''s liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:-

(RS, in crore)

Particulars	2017-18	2016-17
Cash and Cash equivalents:
Beginning of the year	38.22	213.69
End of the year	65.20	38.22
Net cash provided (used) by:
Operating Activities	89.19	1288.92
Investing Activities	(159.28)	(251.80)
Financial Activities	97.07	(1,212.59)

3. Management Discussion and Analysis Report:

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2) (e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,

2015 is presented in a separate section forming part of this Annual Report.

4. Dividend:

The Board of Directors in its meeting held on 12th May, 2018 has recommended dividend of H 15/- per share on the fully paid up Equity Shares of the Company.

5. Investor Eduction and Protection Fund (IEPF):

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules''), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government after the completion of seven years from the date of transfer to the Unpaid Dividend Account of the Company. The shareholders whose dividends have been transferred to the IEPF Authority can claim their dividend from Authority. The unclaimed or unpaid dividend relating to the financial year 2010-11 is due for remittance by the end of September, 2018 to Investor Education and Protection Fund established by Central Government.

Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by shareholders for seven consecutive years or more shall also be transferred to the IEPF Authority. The Company shall sent notice to all shareholders whose shares are due to be transferred to the IEPF Authority and publish requisite advertisement in the newspaper.

The details of these shares is also provided on the website of the Company, at www.vardhman.com.

6. Consolidated Financial Statement:

In accordance with Companies Act 2013 & Indian Accounting Standards (Ind AS) 110 on ‘Consolidated Financial Statements'' read with Ind AS 111 on ‘Joint Arrangements'' and Ind AS 112 on ‘Disclosure of Interest in other entities'', the Audited Consolidated Financial Statements are provided in the Annual Report.

7. Subsidiaries, Joint Ventures and Associate Companies:

The Company does not have any material subsidiary. The details of the financials of the subsidiary and associate companies for the year 2017-18 are as follows:-

VMT Spinning Company Limited (VMT)

This subsidiary of the Company was a Joint Venture with Marubeni Corporation (MC), Japan and Marubeni Hong Kong and South China Limited (MHSCL), Hong Kong. During the year, your Company purchased the entire stake of its Joint Venture partners i.e. 6.66% of MC and 3.88% of MHSCL in VMT. As such VMT became a 100% subsidiary of the Company w.e.f. 6th September, 2017. The Revenue from Operations of VMT has increased to RS, 223.74 crore from RS, 191.13 crore in the last year. The Net Profit of the Company after comprehensive income worked out to RS, 1.78 crore as against RS, 8.26 crore in the previous year registering a decrease of 78.45%.

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged in the business of investment. The earnings of the Company mainly come from the dividend /interest earned on its investments and profits made on sale of investments. During the year, the Company has earned a Net Profit of RS, 10.24 crore as compared to RS, 9.75 crore during the previous year.

Vardhman Acrylics Limited (VAL)

This subsidiary of the Company is engaged in the business of manufacturing of Acrylic Fibre. Presently, the Company holds 70.74% shares in this subsidiary. During the Financial Year 2017-18, VAL recorded Revenue from Operations of RS, 326.97 crore against RS, 368.43 crore in the previous year. The Net Profit of the Company after comprehensive income worked out to RS, 38.47 crore as compared to RS, 40.99 crore in the previous year.

Vardhman Nisshinbo Garments Company Limited (VNGL)

This subsidiary of the Company is a Joint Venture partnership of 51:49 with Nisshinbo Textiles Inc., Japan for manufacturing men''s shirts. During the year, the Revenue from Operations of the Company was RS, 59.81 crore as compared to RS, 58.18 crore in the previous year. The Company posted a Net Profit of RS, 0.34 crore as against a net loss of RS, 0.54 crore in the previous year.

Vardhman Yarns and Threads Limited (VYTL)

Vardhman Yarns and Threads Limited, a Joint Venture with American & Efird Global, LLC (A&E), is an Associate of the Company. It is engaged in the business of threads manufacturing and distribution. Presently, the Company holds 11% stake in VYTL. A&E is the second largest player in threads manufacturing and distribution across the world. During the year under review, the Revenue from Operations were RS, 812.84 crore as against RS, 778.58 crore in the previous year registering an increase of 4.40%. The Net Profit for the year after comprehensive income worked out to RS, 84.43 crore as compared to RS, 99.09 crore during last year registering a decrease of 14.7%.

Vardhman Special Steels Limited

Vardhman Special Steels Limited (VSSL) is an Associate of the Company. The Company holds 27.20% shares of VSSL. During the year, the Revenue from Operations of the Company was RS, 877.89 crore as compared to RS, 753.13 crore in the previous year. The Net Profit for the year after comprehensive income worked out to RS, 24.73 crore as compared to RS, 18.91 crore in the previous year.

Vardhman Spinning & General Mills Limited

Vardhman Spinning & General Mills Limited (VSGM) is an Associate of the Company. The Company holds 50% shares of VSGM. It is a trading Company dealing in the business of Cotton and Fibre. During the year, the Company has not traded any goods. So, the Revenue from Operations is NIL for the Financial Year 2017-18. The Company posted a Net Profit of H 29,404 as against a net loss of H 6,851 in the previous year.

8. Directors:

In accordance with the provisions of the Articles of Association of the Company, Mr. Sachit Jain, Director of the Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommended his appointment for the consideration of members of the Company at ensuing Annual General Meeting.

Cessation from Directorship: During the year, Mr. Shravan Talwar ceased to be the Director of the Company as his term of appointment expired on 22nd September, 2017. Further, IDBI Bank Ltd. has withdrawn the nomination of Mr. Kumar Neel Lohit from the Board of Directors of your Company w.e.f. 11th December, 2017.

Additional Director: During the year, Dr. Parampal Singh was appointed as an Additional Director of the Company w.e.f. 27th November, 2017.

Declaration under Section 149(6):

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof.

Company’s Policy relating to Directors’ appointment, payment of remuneration and discharge of their duties:

The Nomination & Remuneration Committee of the Company has formulated the Nomination & Remuneration Policy on Directors'' appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other matters as provided under Section 178(3) of the Companies Act, 2013.

The Nomination & Remuneration Policy is annexed hereto and form part of this report as Annexure I.

Continuation of Non-Executive Directors:

Pursuant to the provisions of Regulation 17 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015, as amended vide SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, Special Resolution has been proposed to be passed by the Members in the ensuing Annual General Meeting for continuation of directorships of those non-executive directors who are above the age of 75 years viz Mr. Prafull Anubhai, Mr. A.K. Kundra, Mr. D.B. Jain, Dr. S.K. Bijlani.

Familiarization programmes for Board Members:

Your Company has formulated Familiarization Programme for all the Board members in accordance with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Schedule IV of the Companies Act, 2013 which provides that the Company shall familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of Industry in which the Company operates, business model of the Company, etc. through various programs.

The Familiarization Programme for Board members may be accessed on the Company''s website at the link: https:// www.vardhman.com/user_files/investor/familarisation.pdf

Annual Evaluation of the Board Performance:

The meeting of Independent Directors of the Company for the calendar year 2017 was held on 8th November, 2017 to evaluate the performance of Non-Independent Directors, Chairperson of the Company and the Board as a whole.

The evaluation was done by way of discussions on the performance of the Non- Independent Directors, Chairperson and Board as a whole.

A policy on the performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of non-executive directors and executive directors has been formulated by the Company.

9. Key Managerial Personnel (KMP):

In compliance with provisions of Section 203 of the Companies Act, 2013, following are the KMPs of the

Company as on 31st March, 2018:

Sl.	Name	Designation
No.
1.	S.P. Oswal	Chairman & Managing Director
2.	Rajeev Thapar	Chief Financial Officer
3.	Sanjay Gupta	Company Secretary

10. Number of Board Meetings:

During the year under review, the Board met Four (4) times and the intervening gap between any two meetings was within the period prescribed under Companies Act, 2013. The details of Board Meetings are set out in Corporate Governance Report which forms part of this Annual Report.

11. Auditors and Auditors’ Report:

Statutory Auditors:

At the Annual General Meeting held on 22nd September,

2017, Deloitte Haskins & Sells, LLP, Chartered Accountants (Firm registration No. 117366W/W-100018) (‘Deloitte'') were appointed as Statutory Auditors of the Company to hold office till the conclusion of 49th Annual General Meeting of the Company. Their appointment was subject to ratification by Members of the Company in every Annual General Meeting. Now, pursuant to the provisions of section 40 of the Companies (Amendment) Act, 2017, section 139 of Companies Act, 2013 has been amended whereby the requirement of annual ratification of the appointment of Statutory Auditors by the Members of the Company is no longer required. Accordingly, the resolution regarding ratification of the appointment of ‘Deloitte'' as Statutory Auditors is not being proposed in the ensuing Annual General Meeting.

Further, the Statutory Auditors of the Company have submitted Auditors'' Report on the accounts of the Company for the accounting year ended 31st March,

2018. The Auditors'' Report is self-explanatory and requires no comments.

Secretarial Auditor:

M/s. B.K. Gupta & Associates, Company Secretaries in Practice, were appointed as Secretarial Auditors of the Company by the Board of Directors of the Company in its meeting held on 10th May, 2017 for the financial year2017-18.

The Secretarial Auditors of the Company have submitted their Report in Form MR-3 as required under Section 204, of the Companies Act, 2013 for the financial year ended 31st March, 2018. This Report is self-explanatory and requires no comments. The Report forms part of this report as Annexure II.

Cost Auditor:

The Company is maintaining the Cost Records, as specified by the Central Government under section 148(1) of Companies Act, 2013.

The Board of Directors has appointed M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, as the Cost Auditors of the Company to conduct Cost Audit of the Accounts for the financial year ended 2018-19. However, as per provisions of Section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014, the remuneration to be paid to the Cost Auditors is subject to ratification by members at the Annual General Meeting. Accordingly, the remuneration to be paid to M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, for financial year 2018-19 is placed for ratification by the members.

12. Audit Committee & Vigil Mechanism:

Composition of Audit Committee:

The Audit Committee consists of Mr. Prafull Anubhai, Dr. S.K. Bijlani, Mr. D.B. Jain, Mr. A.K. Kundra, Independent Directors and Mr. D.L. Sharma, Director. Mr. Prafull Anubhai is the Chairman of the Committee and Company Secretary of the Company is the Secretary of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism:

Pursuant to provisions of Section 177(9) of the Companies Act, 2013 the Company has established a “Vigil Mechanism" incorporating whistle blower policy in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for employees and Directors of the Company, for expressing the genuine concerns of unethical behavior, actual or suspected fraud or violation of the code of conduct by way of direct access to the Chairman/ Chairman of the Audit Committee.

The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns.

The Policy on Vigil Mechanism and whistle blower policy as approved by the Board may be accessed on the Company''s website at the link: http://www.vardhman.com/ userfiles/?0b9bcdbd?cc01fde3e8e7d39?d93573769 de1941436265078.pdf.

13. Corporate Governance:

The Company has in place a system of Corporate Governance. Corporate Governance is about maximizing shareholder value legally, ethically and sustainably. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the report on Corporate Governance.

14. Corporate Social Responsibility (CSR):

Vision & Core areas of CSR: Your Company is committed to and fully aware of its Corporate Social Responsibility (CSR), the guidelines in respect of which were more clearly laid down in the Companies Act, 2013. The Company''s vision on CSR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for a quality value addition and constructive contribution in building a healthy and better society through its CSR related initiatives and focus on education, environment, health care and other social causes.

CSR Policy: The Corporate Social Responsibility (CSR) Policy of the Company indicating the activities to be undertaken by the Company, as approved by the Board, may be accessed on the Company''s website at the link: https://www.vardhman.com/user files/investor/CSR%20 Policy%20final.pdf

During the year, the Company has spent RS,14.93 crore on CSR activities.

The disclosures related to CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and form part of this report as Annexure III.

15. Business Responsibility Report (BRR):

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandate the inclusion of the BRR as part of the Annual Report for top 500 listed entities based on market capitalization. In compliance with the Listing Regulations, we have integrated BRR disclosure into our Annual Report.

16. Dividend Distribution Policy (DDP):

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the top 500 listed companies are required to formulate a DDP. Accordingly, a DDP was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining profits earned by the Company. The policy is enclosed as Annexure IV to the Board''s report and is also available on the Company''s website at the link: https://www.vardhman.com/user_ files/investor/dividend%20policy.pdf

17. Risk Management:

The Risk Management Policy required to be formulated under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been duly formulated and approved by the Board of Directors of the Company. The aim of risk management policy is to maximize opportunities in all activities and to minimize adversity. The policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company.

The Risk Management policy may be accessed on the Company''s website at the link: http://www.vardhman. com/user files/a4c0a8b00e407cd507553e a7db7f06e89de1272a1436265025.pdf.

18. Internal Financial Controls:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

A report on the Internal Financial Controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 as given by the Statutory Auditors of the Company forms part of Independent Auditor''s Report on Standalone Financial Statements as Annexure B and to the Independent Auditor''s Report on Consolidated Financial Statements as Annexure A.

19. Particulars of Contracts or Arrangements made with Related Parties:

All contracts/arrangements/transactions entered into by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract/arrangement/transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company''s website at the link: http://www. vardhman.com/user files/96c45534e3ab096d9b c682f8eebade0344f915151436264609.pdf.

Your Directors draw attention of the members to Note 46 of the standalone financial statement which sets out related party disclosures.

20. Particulars of Loans, Guarantees or Investments made under section 186 of the Companies Act, 2013:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 4, 5, 9 and 12 to the standalone financial statement).

21. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

Energy conservation continues to be an area of major emphasis in our Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are annexed hereto and form part of this report as Annexure V.

22. Annual Return:

Pursuant to the provisions of Section 134(3)(a) of Companies Act, 2013, as substituted by Companies (Amendment) Act, 2017, w.e.f. 31st July, 2018, the web address of the extract of Annual Return of the Company is https://www.vardhman.com/user_files/investor/MGT-9.pdf.

23. Human Resources /Industrial Relations:

Human resource is considered as the most valuable of all resources available to the Company. The Company continues to lay emphasis on building and sustaining an excellent organization climate based on human performance. The Management has been continuously endeavoring to build high performance culture on one hand and amiable work environment on the other hand. As on 31^st March, 2018, the Company employed around 20,919 employees on permanent rolls.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of the various plants.

24. Particulars of Employees and Related Disclosures:

The disclosures in respect of managerial remuneration as required under section 197(12) read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and form part of this report.

A statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5 (2) and 5 (3) Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and forms part of this report.

In terms of section 197(14) of the Companies Act, 2013, the Company does not have any Holding Company. However, the details regarding remuneration or commission received from any holding or subsidiary of the Company by any Managing or Whole Time Director is annexed hereto and form part of this report.

All the above details are provided in Annexure VI.

25. Material Changes and Commitments, if any, affecting the Financial Position of the Company occurred between the end of the Financial Year to which these Financial Statements relate and the date of this Report:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this report.

26. Directors’ Responsibility Statement:

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013, the Board hereby submit its responsibility Statement:—

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures;

b. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit of the Company for the year ended on 31st March, 2018;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a going concern basis;

e. the Internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

27. General Disclosures:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

4. Change in nature of Business of Company.

Further, your Directors state that the Company has complied with the provisions relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and there was no case filed under the said Act.

28. Vardhman Textiles Limited Employee Stock Option Plan, 2016:

The Company has granted options to its employees under Vardhman Textiles Limited Employee Stock Options Plan, 2016 (hereinafter referred as ESOP Plan). As per the terms of the plan, the Company can grant a maximum of 6,36,518 options to eligible employees from time to time. One option entitles the holder to apply for one equity share of the Company in terms of ESOP Plan. Accordingly, during the financial year, a total of 49,250 options were exercised by the eligible employees. Out of this, 42,450 equity shares were allotted during the year ended 31st March, 2018 and 6800 equity shares were allotted on 9th April, 2018. So, the paid up equity share capital of the Company stood increased to RS, 57,43,34,600 as on 31st March, 2018.

The ESOP Plan of the Company is being implemented in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and the resolution passed by the shareholders approving the said plan. A certificate received from the Auditors of the Company in this regard would be available at the Annual General Meeting for the inspection by the Members.

The details as required to be disclosed are put on the Company''s website and may be accessed at https://www. vardhman.com/user_files/investor/ESOP%20Disclosure.pdf

29. Acknowledgement:

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers, Business Constituents and Shareholders for their continued and valuable co-operation and support to the Company and look forward to their continued support and co-operation in future too.

They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

For and on behalf of The Board

Place : Ludhiana (S.P. Oswal)

Dated : 13th August, 2018 Chairman & Managing Director

---

Mar 31, 2017

Dear Members,

The Directors of your Company have pleasure in presenting their 44^th Annual Report of the business and operations of the Company along with the Audited Financial Statements for the year ended, 31^st March, 2017.

1. Financial Results:

The financial performance of your Company for the year ended 31^st March, 2017 is as under:-

(Rs. in lakhs)

Particulars	2016-17	2015-16
Revenue from operations (Net)	5,72,828.74	5,61,395.80
Other Income	56,758.24	24,097.29
Profit before Depreciation, Interest & Tax (PBDIT)	1,72,613.76	1,34,918.69
Interest and Financial expenses	9,183.10	8,670.69
Profit before Depreciation and Tax (PBDT)	1,63,430.66	1,26,248.00
Depreciation & Amortisation	32,949.39	36,309.60
Profit before Tax (PBT)	1,30,481.27	89,938.40
Provision for Tax - Current	28,157.00	22,184.15
- Deferred Tax (Net of Adjustment)	3,194.83	114.43
- MAT Credit Entitlement	(1,029.85)	-
Profit after tax (PAT)	1,00,159.29	67,639.82
Other Comprehensive Income	(21.76)	(4.07)
Total Comprehensive Income for the period	1,00,137.53	67,635.75
Earnings per share (Rs.)
- Basic	163.67	109.00
- Diluted	163.67	109.00

Note: The financial statements of the Company for the year ended 31^st March, 2017, are the first the Company has prepared in accordance with Indian Accounting Standards (Ind AS). The financial statements for the year ended 31^st March, 2016 have been restated in accordance with Ind AS for comparative information.

Indian Accounting Standards (Ind AS):

The Ministry of Corporate Affairs (MCA), vide its notification in the Official Gazette dated 16^th February, 2015, notified the Ind AS applicable to certain classes of Companies. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Ind AS is applicable on the Company from 1^st April, 2016, with a transition date of 1^st April, 2015.

The reconciliations and descriptions of the effect of the transition from IGAAP to Ind AS have been provided in Note No. 35 in the notes to accounts of the financial statements.

2. Financial Analysis and Review of Operations: Production & Sales Review:

During the year under review, your Company has registered Revenue from Operations of Rs.5,72,828.74 Lakhs as compared to Rs.5,61,395.80 Lakhs in the previous year. The exports of the Company decreased from Rs.2,27,486.33 Lakhs to Rs.2,20,690.98 Lakhs showing a decrease of 2.99% over the previous year. The business wise performance is as under:-

a) Yarn:

The production of Yarn decreased marginally from 2,04,142 MT to 2,02,770 MT during the year 2016-17.

b) Fabric:

During the year, the production of grey fabric remained same as last year i.e. 175 million meter. The production of processed fabric increased from 112 million meter to 117 million meter.

Profitability:

The Company earned profit before depreciation, interest and tax of Rs.1,72,613.76 Lakhs as against Rs.1,34,918.69 Lakhs in the previous year. After providing for depreciation & amortisation of Rs.32,949.39 Lakhs (Previous Year Rs.36,309.60 Lakhs), interest of Rs.9,183.10 Lakhs (Previous Year Rs.8,670.69 Lakhs), provision for current tax of Rs.28,157 Lakhs (Previous Year Rs.22,184.15 Lakhs), deferred tax (net of adjustments) of Rs.3,194.83 Lakhs [Previous Year Rs.114.43 Lakhs], and MAT credit entitlement of ’ (1,029.85) Lakhs [Previous year Nil], the net profit from operations after comprehensive income worked out to Rs.1,00,137.53 Lakhs as compared to Rs.67,635.75 Lakhs in the previous year.

Resources Utilisation:

a) Fixed Assets:

The Net Block as at 31^st March, 2017 was Rs.2,45,815.29 Lakhs as compared to Rs.2,50,011.86 Lakhs in the previous year.

b) Current Assets:

The current assets as on 31^st March, 2017 were Rs.3,41,125.92 Lakhs as against Rs.3,24,086.67 Lakhs in the previous year. Inventory level was at Rs.1,58,900.38 Lakhs as compared to the previous year level of Rs.1,80,911.59 Lakhs.

Financial Conditions & Liquidity:

The Company enjoys a rating of “AA /Stable” from Credit Rating Information Services of India (CRISIL) for long term borrowings and “A1 ” for short term borrowings, respectively. Management believes that the Company’s liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:-

(Rs. in lakhs)

Particulars	2016-17	2015-16
Cash and Cash equivalents:
Beginning of the year	27,676.95	17,554.77
End of the year	4,047.11	27,676.95
Net cash provided (used) by:
Operating Activities	1,22,809.99	86,860.38
Investing Activities	(25,181.29)	(47,966.21)
Financial Activities	(1,21,258.54)	(28,772.00)

3. Management Discussion and Analysis Report:

Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34(2) (e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report.

4. Dividend:

The Board of Directors in its meeting held on 10^th May, 2017 has recommended dividend of Rs.15/per share on the fully paid up Equity Shares of the Company.

5. Investor Education and Protection Fund (IEPF):

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013 read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (“the Rules”) all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government after the completion of seven years from the date of completion. The shareholders whose dividends have been transferred to the IEPF Authority can claim their dividend from the Authority. The unclaimed or unpaid dividend relating to the financial year 2009-10 is due for remittance by the end of September, 2017 to the Investor Education and Protection Fund established by the Central Government.

Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the IEPF Authority. In accordance with new Rules, the Company sent notice to all shareholders whose shares are due to be transferred to the IEPF Authority and published requisite advertisement in the newspaper.

The details of these shares is provided on the website of Company, at www.vardhman.com

6. Consolidated Financial Statement:

In accordance with the Companies Act, 2013 & Indian Accounting Standards (Ind AS) 110 on ‘Consolidated Financial Statements’ read with Ind AS 111 on ‘Joint Arrangements’ and Ind AS 112 on ‘Disclosure of Interest in other entities’, the Audited Consolidated Financial Statements is provided in the Annual Report.

7. Subsidiaries, Joint Ventures and Associate Companies:

During the year under review, Vardhman Yarns and Threads Limited, a Joint Venture with American & Efird Global, LLC (A&E) ceased to be Subsidiary of the Company and has become an Associate Company. No other Company has become or ceased to be Company’s subsidiary, joint venture or associate company. Further, the Company does not have any material subsidiary. The details of the financials of the subsidiary and associate companies for the financial year 2016-17 are as follows:-

VMT Spinning Company Limited (VMT):

This subsidiary of the Company is a Joint Venture with Marubeni Corporation and Marubeni Hong Kong and South China Limited of Japan. The Revenue from operations of the company has increased to Rs.19,112.99 lakhs from Rs.15,663.72 lakhs in the last year. The Net Profit of the Company after comprehensive income worked out to Rs.826.11 lakhs as against Rs.738.97 lakhs in the previous year registering an increase of 11.79%. Out of the total present paid-up capital of Rs.2,070.02 lakhs, your Company holds 89.44%.

VTL Investments Limited (VTL):

This 100% subsidiary of your Company is engaged in the business of investment. The earnings of the company mainly comes from dividend/interest earned on its investments and profits made on sale of investments. During the year, the Company has earned a net profit of Rs.975.12 lakhs as compared to Rs.357.01 lakhs in the previous year.

Vardhman Acrylics Limited (VAL):

This subsidiary of the Company is engaged in the business of manufacturing of Acrylic Fibre. Presently, the Company holds 70.74% shares in this subsidiary. During the Financial Year 2016-17, VAL recorded Revenue from operations of Rs.36,842.96 lakhs against Rs.44,759.18 lakhs in the previous year. The net profit of the company after comprehensive income worked out to Rs.4,099.14 lakhs as compared to Rs.4,080.18 lakhs in the previous year.

Vardhman Nisshinbo Garments Company Limited (VNGL):

This subsidiary of the Company is a Joint Venture partnership of 51:49 with Nisshinbo Textiles Inc., Japan for manufacturing men’s shirts. During the year, the Revenue from Operations of the company was Rs.5,828.84 lakhs as compared to Rs.5,799.22 lakhs in the previous year. The company incurred a Net Loss of Rs.53.88 lakhs as against a net profit of Rs.153.36 lakhs in the previous year.

Vardhman Yarns and Threads Limited (VYTL):

Vardhman Yarns and Threads Limited, Joint Venture with American & Efird Global, LLC (A&E), is an Associate Company of the Company. It is engaged in the business of Threads Manufacturing and Distribution. During the year, the Company has sold its 40% stake in VYTL to A&E and is now holding 11% stake in VYTL. A&E is the second largest player in Threads Manufacturing and Distribution across the world. During the year under review, the Revenue from Operations were Rs.77,857.87 lakhs as against Rs.72,863.26 lakhs in the previous year registering an increase of 6.85%. The Net Profit for the year after comprehensive income worked out to Rs.9,909.48 lakhs as compared to Rs.8,991.66 lakhs during last year registering an increase of 10.21%.

Vardhman Special Steels Limited:

Vardhman Special Steels Limited (VSSL) is an Associate Company of the Company. The Company holds 31.39% shares of VSSL. During the year, the Revenue from Operations of the Company was Rs.75,312.90 lakhs as compared to Rs.72,551.41 lakhs in the previous year. The Net Profit for the year after comprehensive income worked out to Rs.1,891.01 lakhs as compared to Rs.405.12 lakhs in the previous year.

Vardhman Spinning & General Mills Limited:

Vardhman Spinning & General Mills Limited (VSGM) is an Associate Company of the Company. The Company holds 50% shares of VSGM. It is a trading Company dealing in the business of Cotton and Fibre. During the year, the Company has not traded any goods. So, the Revenue from Operations is Nil for the Financial Year 2016-17. The Company incurred a Net Loss of Rs.6,851 as against a net loss of Rs.27, 292 in the previous Year.

8. Directors:

Joint Managing Director:

Mrs. Suchita Jain has been appointed as Joint Managing Director of the Company w.e.f. 24^th August, 2016. Her appointment was approved by the Members vide their resolution dated 2^nd February, 2017, passed by Postal Ballot.

Liable to retire by rotation:

In accordance with the provisions of the Articles of Association of the Company, Mr. D.L. Sharma, Director of the Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommended his appointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

Nominee Director:

During the year, IDBI Bank has withdrawn the nomination of Mr. Suresh Khatanhar, from the Board of your Company w.e.f. 19^th November, 2016 and has nominated Mr. Kumar Neel Lohit as the Nominee Director w.e.f. 28^th November, 2016.

Declaration under Section 149(6):

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof.

Company’s Policy relating to Directors appointment, payment of remuneration and discharge of their duties:

The Nomination & Remuneration Committee of the Company has formulated the Nomination & Remuneration Policy on Director’s appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other matters as provided under Section 178(3) of the Companies Act, 2013.

The Nomination & Remuneration Policy is annexed hereto and forms part of this report as Annexure I.

Familiarization Programme for Board Members:

Your Company has formulated Familiarization Programme for all the Board members in accordance with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Schedule IV of the Companies Act, 2013 which provides that the Company shall familiarize the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of Industry in which the Company operates, business model of the Company, etc. through various programs.

The Familiarization Programme for Board members may be accessed on the Company’s website at the link: https://www.vardhman.com/user files/investor/ familarisation.pdf

Annual Evaluation of the Board Performance:

The meeting of Independent Directors of the Company for the calendar year 2016 was held on 15^th November, 2016 to evaluate the performance of Non-Independent Directors, Chairperson of the Company and the Board as a whole.

The evaluation was done by way of discussions on the performance of the Non- Independent Directors, Chairperson and Board as a whole and the minutes of the meeting was submitted to the Chairman of the Company.

A policy on the performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of non-executive directors and executive directors has been formulated by the Company.

9. Key Managerial Personnel (KMP):

In compliance with provisions of Section 203 of the Companies Act, 2013, following are the KMPs of the Company as on 31^st March, 2017:

S.No.	Name	Designation
1.	S.P. Oswal	Chairman & Managing Director
2.	Rajeev Thapar	Chief Financial Officer
3.	Karan Kamal	Company Secretary
	Walia*

* Ms. Karan Kamal Walia, Company Secretary resigned from the Company w.e.f. 11^th May, 2017 and Mr. Sanjay Gupta has been appointed as Company Secretary in her place w.e.f. 1^st June, 2017.

10. Number of Board Meetings:

During the year under review, the Board met five (5) times and the intervening gap between any two meetings was within the period prescribed under Companies Act, 2013. The details of Board Meetings are set out in Corporate Governance Report which forms part of this Annual Report.

11. Auditors and Auditors Report:

Statutory Auditors:

M/s S.C. Vasudeva & Company, the existing Statutory Auditors of the Company have submitted Auditors’ Report on the accounts of the Company for the accounting year ended 31^st March, 2017. The Auditors’ Report is self-explanatory and requires no comments.

Further, pursuant to Section 139 of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of the maximum term permitted under the said section. The Audit Committee of the Company has proposed, and on 10^th May, 2017, the Board of Directors of the Company has recommended the appointment of Deloitte Haskins & Sells, LLP, Chartered Accountants (Firm registration No. 117366W/W-100018) (‘Deloitte’) as the statutory auditors of the Company. Deloitte will hold office for a period of five consecutive years from the conclusion of 44^th Annual General Meeting till the conclusion of 49^th Annual General Meeting, subject to the approval of the Members of the Company.

Secretarial Auditor:

M/s. B.K. Gupta & Associates, Company Secretary in Practice, were appointed as Secretarial Auditors of the Company by the Board of Directors of the Company in its meeting held on 9^th May, 2016 for the financial year 2016-17.

The Secretarial Auditors of the Company have submitted their Report in Form No. MR-3 as required under Section 204, of the Companies Act, 2013 for the financial year ended 31^st March, 2017. This Report is self-explanatory and requires no comments. The Report forms part of this report as Annexure II.

Cost Auditor:

The Board of Directors has appointed M/s Ramanath Iyer & Company, Cost Accountants,

New Delhi, as the Cost Auditors of the Company to conduct Cost Audit of the Accounts for the financial year ended 2017-18. However, as per provisions of Section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014, the remuneration to be paid to the Cost Auditors is subject to ratification by Members at the Annual General Meeting. Accordingly, the remuneration to be paid to M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, for financial year 2017-18 is placed for ratification by the Members.

The Cost Auditor’s Report for the Financial Year 2017-18 will be forwarded to the Central Government as required under law.

12. Audit Committee & Vigil Mechanism: Composition of Audit Committee:

The Audit Committee consists of Mr. Prafull Anubhai, Independent Director, Dr. S.K. Bijlani, Independent Director, Mr. Shravan Talwar, Independent Director, Mr. D.B. Jain, Independent Director, Mr. A.K. Kundra, Independent Director and Mr. D.L. Sharma, Director. Mr. Prafull Anubhai is the Chairman of the Committee and Company Secretary of the Company is the Secretary of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism:

Pursuant to provisions of Section 177(9) of the Companies Act, 2013 the Company has established a “Vigil Mechanism” incorporating whistle blower policy in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 201 5 for employees and Directors of the Company, for expressing the genuine concerns of unethical behavior, actual or suspected fraud or violation of the code of conduct by way of direct access to the Chairman/ Chairman of the Audit Committee.

The Company has also provided adequate safeguards against victimization of employees and Directors who express their concerns.

The Policy on Vigil Mechanism and whistle blower policy as approved by the Board may be accessed on the Company’s website at the link: http://www.vardhman.com/ userfiles/20b9bcdbd2cc01fde3e8e7d392d9357376 9de1941436265078.pdf.

13. Corporate Governance:

The Company has in place a system of Corporate Governance. Corporate Governance is about maximizing shareholder value legally, ethically and sustainably. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the report on Corporate Governance.

14. Corporate Social Responsibility (CSR):

Vision & Core areas of CSR: Your Company is committed to and fully aware of its Corporate Social Responsibility (CSR), the guidelines in respect of which were more clearly laid down in the Companies Act, 2013. The Company’s vision on CSR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for a quality value addition and constructive contribution in building a healthy and better society through its CSR related initiatives and focus on education, environment, health care and other social causes.

The Company has identified following focus areas for CSR:-

Promoting Education: Promoting education by setting up schools, colleges etc. in order to deliver high quality education besides augmenting infrastructure of existing educational institutions. This may include initiatives like grant of scholarships to poor & meritorious students in our schools & colleges.

Preventive Healthcare: Providing Healthcare equipment and other facilities to local dispensaries and hospitals. This shall include augmenting infrastructure of such facilities.

Rural Development: Rural development centric CSR initiatives, including electrification through solar power, providing safe drinking water, sanitation etc. This may include participation in Govt. run welfare projects in partnership with the private sector.

Skill Enhancement with special emphasis on Women Empowerment: Focus on initiatives enabling functional literacy of women as also employment and livelihood enhancing vocational skills by imparting proper training.

Environment: Activities to protect the degradation of Environment including preservation of natural resources, energy conservation, recycling of waste products, reduction in emission of harmful pollutants, improving fertility of land, enhancement of green cover etc.

Public Private Partnership Initiatives: The company shall also engage in CSR projects which call for a public private partnership for undertaking rural development and helping the underdeveloped community.

Any other project (as defined in Schedule VII of the Companies Act, 2013) may also be taken up as and when considered necessary.

CSR Policy: The Corporate Social Responsibility (CSR) Policy of the Company indicating the activities to be undertaken by the Company, as approved by the Board, may be accessed on the Company’s website at the link: https://www.vardhman.com/ user files/investor/CSR%20Policy%20final.pdf

During the year, the Company has spent Rs.540.91 Lakhs on CSR activities.

The disclosures related to CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and form part of this report as Annexure III.

15. Business Responsibility Report (BRR):

SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandate the inclusion of the BRR as part of the Annual Report for top 500 listed entities based on market capitalization. In compliance with the Listing Regulations, we have integrated BRR disclosure into our Annual Report.

16. Dividend Distribution Policy (DDP):

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the top 500 listed companies are required to formulate a DDP. Accordingly, a DDP was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or retaining profits earned by the Company. The policy is enclosed as Annexure IV to the Board’s report and is also available on the Company’s website at the link: https://www.vardhman.com/user files/ investor/Dividend%20Policy.pdf

17. Risk Management:

The Risk Management Policy required to be formulated under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been duly formulated and approved by the Board of Directors of the Company. The aim of risk management policy is to maximize opportunities in all activities and to minimize adversity. The policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company.

The Risk Management policy may be accessed on the Company’s website at the link: http://www.vardhman. com/user files/a4c0a8b00e407cd507553ea 7db7f06e89de1272a1436265025 .pdf.

18. Internal Financial Controls & Its Adequacy:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

A report on the Internal Financial Controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 as given by the Statutory Auditors of the Company forms part of Independent Auditor’s Report on Standalone Financial Statements as Annexure B and to the Independent Auditor’s Report on Consolidated Financial Statements as Annexure A.

19. Particulars of Contracts or Arrangements made with Related Parties:

All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. During the year, the Company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable .

The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company’s website at the link: http://www.vardhman.com/user files/96c45534e3ab096d9bc682f8eebade 0344f915151436264609.pdf.

Your Directors draw attention of the Members to Note 45 to the standalone financial statement which sets out related party disclosures.

20. Particulars of Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 4, 5, 9 and 12 to the standalone financial statement).

21. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo:

Energy conservation continues to be an area of major emphasis in our Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are annexed hereto and form part of this report as Annexure V.

22. Annual Return:

The extracts of Annual Return pursuant to the provisions of Section 92, 134 and Rule 12 of the Companies (Management and Administration) Rules, 2014 for the financial year 2016-17 in Form MGT-9 is annexed hereto and form part of this report as Annexure VI.

23. Human Resources /Industrial Relations:

Human resource is considered as the most valuable of all resources available to the Company. The Company continues to lay emphasis on building and sustaining an excellent organization climate based on human performance. The Management has been continuously endeavouring to build high performance culture on one hand and amiable work environment on the other hand. During the year, the Company employed around 21,206 employees on permanent rolls.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of the various plants.

24. Particulars of Employees and Related Disclosures:

The disclosures in respect of managerial remuneration as required under section 197(12) read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and form part of this report.

A statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5 (2) and 5 (3) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and form part of this report.

In terms of section 197(14) of the Companies Act, 2013, the Company does not have any Holding Company. However, the details regarding remuneration or commission received from subsidiary company by any Managing or Whole Time Director is annexed hereto and form part of this report.

All the above details are provided in Annexure VII.

25. Material Changes and Commitment, if any, affecting the Financial Position of the Company occurred between the end of the Financial Year to which this Financial Statements relate and the date of the Report:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate on the date of this report.

26. Directors Responsibility Statement:

Pursuant to the provisions of Section 134 (5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures;

b. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2017 and of the profit of the Company for the year ended on 31^st March, 2017;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a going concern basis;

e. the Internal financial controls has been laid down to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. a proper system has been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

27. General Disclosures:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

4. No change in nature of Business of Company.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Buyback of Securities:

During the year, the Company had bought back and extinguished 62,60,869 Equity shares of Rs.10/- each at a price of Rs.1,150 per share. The paid-up capital of the Company post buyback is Rs.57,39,10,100.

Vardhman Textiles Limited Employee Stock Option Plan, 2016:

The Board of Directors in its meeting held on 9^th May, 2016 approved introduction of an equity based compensation scheme called “Vardhman Textiles Limited Employee Stock Option Plan 2016” for its eligible employees subject to approval of Members of the Company in the 43^rd Annual General Meeting. The Board has delegated necessary power to the Nomination and Remuneration Committee to implement and administer the Plan once approved by the shareholders of the Company. Accordingly, the Nomination and Remuneration Committee of the Company has granted 6,14,000 Options out of a total of 6,36,518 Options till date.

28. Acknowledgment:

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers, Business Constituents and Shareholders for their continued and valuable co-operation and support to the Company and look forward to their continued support and cooperation in future too.

They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

for and on behalf of the Board

Place : Ludhiana (S.P. Oswal)

Dated : 11^th August, 2017 Chairman & Managing Director

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Mar 31, 2016

The Directors of your Company have pleasure in presenting their 43ld Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended, 31st March, 2016.

1. FINANCIAL RESULTS:

The financial results for the year are as under:- (Rs. in crore)

Particulars 2015-2016 2014-2015

Revenue from operations (Net) 5,587.14 5,742.03

Profit before Depreciation, Interest & Tax (PBDIT) 1,313.42 1,099.66

Interest and Financial expenses 86.85 121.54

Profit before Depreciation and Tax (PBDT) 1,226.57 978.12

Depreciation 361.93 488.85

Profit before Tax (PBT) 864.64 489.27

Provision for Tax - Current 221.82 186.00

- Deferred Tax (Net of Adjustment) (10.23) (55.84)

Profit for the period after tax (PAT) 653.05 359.11

Add: Corporate Dividend Tax written back 13.31 2.20

Less: Depreciation charged to reserves as per Schedule II - 61.10 of Companies Act, 2013

Add: Deferred tax on depreciation charged - 11.83

Balance brought back 942.71 1,057.64

Balance available for appropriation 1,609.07 1,369.68

Appropriations:

Interim Dividend 95.48 -

Proposed Dividend on Equity shares - 63.65

Corporate Dividend Tax 1.08 13.32

Transfer to General Reserve - 350.00

Closing Balance of surplus i.e. Balance in statement of 1,512.51 942.71 Profit & Loss

Earnings per share (Rs.)

- Basic 102.60 56.42

- Diluted 102.60 56.42

Dividend per share (Rs.) 15.00 10.00 (Interim & Final)

2. FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:

Production & Sales Review:

During the year under review, your Company has registered Revenue from Operations of Rs.5,587.14 crore as compared to Rs.5,742.03 crore in the previous year. The export of the Company decreased from Rs.2,442.48 crore to Rs.2,274.84 showing a decrease of 6.86% over the previous year. The business wise performance is as under:-

a) Yarn:

The production of Yarn increased from 190,009 MT to 204,142 MT during the year 2015-16. The sales of yarn (including internal transfers) increased from 196,882 MT to 206,914 MT during the year 2015-16.

b) Fabric:

During the year, the production of grey fabric increased from 170 million meter to 175 million meter, showing an increase of 2.94% over the previous year. The production of processed fabric increased from 110 million meter to 112 million meter. The sales of grey fabric (including internal transfers) increased from 170 million meter to 175 million meter. The sales of processed fabric increased from 111 million meter to 112 million meter.

Profitability:

The Company earned profit before depreciation, interest and tax of Rs.1,313.42 Crore as against Rs.1,099.66 Crore in the previous year. After providing for depreciation of Rs.361.93 Crore (Previous Year Rs.488.85 Crore), interest of Rs.86.85 Crore (Previous Year Rs.121.54 Crore), provision for current tax Rs.221.82 Crore (Previous Year Rs.186.00 Crore), deferred tax (net of adjustments) C(10.23) Crore [Previous Year C(55.84) Crore], the net profit from operations worked out to Rs.653.05 Crore as compared to Rs.359.11 Crore in the previous year.

Resources Utilisation:

a) Fixed Assets:

The net fixed assets (including work-in-progress) as at 31st March, 2016 were Rs.2,573.18 crore as compared to Rs.2,573.05 crore in the previous year.

b) Current Assets:

The current assets as on 31st March, 2016 were Rs.3,145.09 Crore as against Rs.2,960.84 Crore in the previous year. Inventory level was at Rs.1,809.12 Crore as compared to the previous year level of Rs.1,636.73 Crore.

Financial Conditions & Liquidity:

The Company enjoys a rating of "AA/stable" from Credit Rating Information Services of India Limited (CRISIL) for long term borrowings and "A1 " for short term borrowings respectively. Management believes that the Company''s liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:-

(Rs. in crore)

Particulars 2015-2016 2014-2015

Cash and Cash equivalents:

Beginning of the year 175.55 52.75

End of the year 276.77 175.55

Net cash provided (used) by:

Operating Activities 868.60 1,210.89

Investing Activities (479.66) (144.18)

Financial Activities (287.72) (943.91)

3. DIVIDEND:

During the year, the Board of Directors in its meeting held on 11th March, 2016 had declared an interim dividend of Rs.15/- per share on the Fully Paid-up Equity Shares of the Company.

This Interim Dividend is the Final Dividend and no further dividend was declared by the Board of Directors of the Company for Financial year 2015-16.

4. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

In terms of Section 125 of the Companies Act, 2013, unclaimed or unpaid Dividend relating to the financial year 2008-09 is due for remittance by the end of September, 2016 to the Investor Education and Protection Fund established by the Central Government.

5. CONSOLIDATED FINANCIAL STATEMENT:

In accordance with the Companies Act, 2013 and Accounting Standard (AS)- 21 on Consolidated Financial Statements read with AS-23 on Accounting for Investments in Associates and AS-27 on Financial Reporting of Interests in Joint Ventures, the Audited Consolidated Financial Statement is provided in the Annual Report.

6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

During the year under review, no Company has become or ceased to be Company''s subsidiaries, joint ventures or associate companies. Further, the Company does not have any material subsidiary. The Company has following subsidiary and associate companies, the details of their financials for 2015-16 are given below:-

VMT Spinning Company Limited (VMT)

This subsidiary of the Company is a Joint Venture with Marubeni Corporation and Marubeni Hong Kong and South China Limited of Japan. The Revenue from operations of the Company has decreased to Rs.156.58 crore from Rs.167.23 crore in the last year. The Company earned a net profit of Rs.7.36 crore as against the profit of Rs.2.79 crore in the previous year registering an increase of 163.80%. Out of the total present paid-up capital of Rs.20.70 crore, your Company holds 89.44%.

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged with the business of investments in the shares etc. The earnings of the Company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the year, the Company has earned a net profit of Rs.3.57 crore.

Vardhman Acrylics Limited (VAL)

This subsidiary of the Company is engaged in the business of manufacturing of Acrylic Fibre. Presently, the Company holds 70.75% shares in this subsidiary. During the Financial Year 2015-16, VAL recorded revenue from operations of Rs.411.61 crore (including trading of goods of Rs.131.42 crore) as against Rs.498.08 crore (trading of goods Rs.153.08 crore) in the previous financial year. The net profit for the year has decreased to Rs.29.83 crore from Rs.33.42 crore in the previous year.

Vardhman Yarns & Threads Limited (VYTL)

This subsidiary of the Company, a Joint Venture with American & Efird Global, LLC (A&E), is engaged in the business of Threads Manufacturing and Distribution. The Company has a joint venture partnership of 51:49 with A&E, which is the second largest player in Threads Manufacturing and Distribution across the world. During the year under review, the Revenue from Operations were Rs.728.48 crore as against Rs.696.67 crore in the previous year registering an increase of 4.57%. The Net Profit for the year was Rs.86.55 crore as compared to Rs.72.04 crore during last year registering an increase of 20.14%. This has been possible because of increase in production and sales revenue in all the verticals i.e. Consumers, Industrial and Specialty products.

Vardhman Nisshinbo Garments Company Limited (VNGL)

This subsidiary of the Company is a Joint Venture partnership of 51:49 with Nisshinbo Textiles Inc., Japan for manufacturing world class men''s shirts. During the year, the Revenue from Operations of the Company was Rs.57.69 crore as compared to Rs.47.07 crore in the previous year. The Company earned a Net Profit of Rs.2.00 crore as against a Net Profit of Rs.0.15 crore in the previous year.

Vardhman Special Steels Limited (VSSL)

VSSL is an Associate Company of the Company. The Company holds 31.39% shares of VSSL. During the year, the Revenue from Operations of the Company was Rs.656.56 crore as compared to Rs.661.60 crore in the previous year. The Company earned a Net profit of Rs.5.21 crore as against a Net Loss of Rs.15.13 crore in the previous year.

Vardhman Spinning & General Mills Limited (VSGM)

VSGM is an Associate Company of the Company. The Company holds 50% shares of VSGM. It is a trading Company dealing in trading of Cotton and Fibre. During the year, the Company has not traded any goods. So, the Revenue from Operations is NIL for the Financial Year 2015-16. The Company incurred a Net Loss of Rs.27, 292 as against a Net Loss of Rs.38,062 in the previous year.

Disinvestment in VYTL:

The Board of Directors of your Company in its meeting held on 9th May, 2016 have approved the execution of a Share Sale and Purchase Agreement ("SPA"), the Amended and Restated Shareholders Agreement, and other incidental and ancillary agreements (collectively, "Transaction Documents") to be entered into between the Company, VYTL and A&E. In terms of the SPA, the Company inter alia will sell 22,802,541 (Two crore Twenty Eight Lakh Two Thousand Five Hundred and Forty One) equity shares held by the Company in VYTL aggregating to 40% (Forty per cent) of the issued, subscribed and paid-up equity share capital of VYTL to A&E. The consideration will be based on an equity valuation of Rs.990 crores of VYTL as of 31st March, 2016 and the adjustment formula linked to the closing date.

Post the said acquisition by A&E, the Company will have a ''put option'' and A&E will have a ''call option'' on the remaining 11% (Eleven per cent) issued, subscribed and paid-up equity share capital of VYTL held by the Company, and such put option / call option will be exercisable by the Company or A&E, as the case may be, at any time beginning 3 (Three) years following the closing under the SPA.

7. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate on the date of this report.

8. CORPORATE SOCIAL RESPONSIBILITY:

Your Company is committed to and fully aware of its Corporate Social Responsibility (CSR), the guidelines in respect of which were more clearly laid down in the new Companies Act. The Company''s vision on CSR is that the Company being a responsible Corporate Citizen would continue to make a serious endeavor for a quality value addition and constructive contribution in building a healthy and better society through its CSR related initiatives and focus on education, environment, health care and other social causes.

The Corporate Social Responsibility Committee of the Company in its meeting held on 11th March, 2016 has amended the Corporate Social Responsibility (CSR) Policy of the Company indicating the activities to be undertaken by the Company, which has been approved by the Board.

The Amended CSR policy may be accessed on the Company''s website at the link: https://www.vardhman.com/user_files/investor/CSR%20 Policy%20final.pdf

The Company has identified following focus areas for CSR:-

- Promoting Education: Promoting education by setting up schools, colleges etc. in order to deliver high quality education besides augmenting infrastructure of existing educational institutions. This may include initiatives like grant of scholarships to poor & meritorious students in our schools & colleges.

- Preventive Healthcare: Providing Healthcare equipment and other facilities to local dispensaries and hospitals. This shall include augmenting infrastructure of such facilities.

- Rural Development: Rural development centric CSR initiatives, including electrification through solar power, providing safe drinking water, sanitation etc. This may include participation in Government run welfare projects in partnership with the private sector.

- Skill Enhancement with special emphasis on Women Empowerment: Focus on initiatives enabling functional literacy of women as also employment and livelihood enhancing vocational skills by imparting proper training.

- Environment: Activities to protect the degradation of Environment including preservation of natural resources, energy conservation, recycling of waste products, reduction in emission of harmful pollutants, improving fertility of land, enhancement of green cover etc.

- Public Private Partnership Initiatives: The Company shall also engage in CSR projects which call for a Public Private Partnership for undertaking rural development and helping the underdeveloped community.

- Any other project (as defined in Schedule VII of the Companies Act, 2013) may also be taken up as and when considered necessary.

During the year, the Company has spent Rs.5.01 crores on CSR activities.

The disclosures related to CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and form part of this report as Annexure I.

9. RISK MANAGEMENT:

The Board of Directors in their meeting held on 7th November, 2014 had constituted Risk Management Committee of the Company. Thereafter, SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 became effective from 1st December, 2015. These regulations provide for the obligation to constitute Risk Management Committee only on top 100 Listed Companies. Therefore, the Board of Directors in its meeting held on 9th May, 2016 approved dissolution of the Risk Management Committee of the Company w.e.f 9th May, 2016.

However, the Risk Management Policy of the Company required to be formulated under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been duly formulated and approved by the Board of Directors of the Company. The policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company.

The Risk Management policy may be accessed on the Company''s website at the link: http://www.vardhman.com/user_files/ a4Rs.0a8b00e407cd507553ea7db7f06e89de1272a1436265025.pdf.

10. INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

A Report on the Internal Financial Controls under Clause (i) of sub- section 3 of Section 143 of the Companies Act, 2013 is annexed to Independent Auditor''s Report on Standalone Financial Statements as Annexure B and to Independent Auditors Report on Consolidated Financial Statements as Annexure A.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the provisions of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Policy on dealing with Related Party Transactions as approved by the Board may be accessed on the Company''s website at the link: http://www.vardhman.com/user_files/96Rs.45534e3ab096d9bRs.682f8 eebade0344f915151436264609.pdf.

Your Directors draw attention of the members to Note 41 to the Standalone Financial Statement which sets out related party disclosures.

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the standalone financial statement (Please refer to Note 14, 15 and 17 to the standalone financial statement).

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mrs. Suchita Jain, Director of the Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting, pursuant to the provisions of the Articles of Association of the Company and being eligible, offers herself for re-appointment. The Board recommended her appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.

Declaration under Section 149(6):

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof.

Company''s Policy relating to Directors appointment, payment of remuneration and discharge of their duties:

The Nomination & Remuneration Committee of the Company has formulated the Nomination & Remuneration Policy on Director''s appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other matters as provided under Section 178(3) of the Companies Act, 2013.

The Nomination & Remuneration Policy is annexed hereto and form part of this report as Annexure II.

Familiarisation programmes for Board Members:

Your Company has formulated Familiarisation Programme for all the Board members in accordance with Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Schedule IV of the Companies Act, 2013 which provides that the Company shall familiarise the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of Industry in which the Company operates, business model of the Company, etc. through various programmes.

The Familiarisation Programme for Board members may be accessed on the Company''s website at the link: https://www.vardhman.com/user_files/investor/familarisation.pdf Annual Evaluation of the Board Performance:

The meeting of Independent Directors of the Company for the calendar year 2015 was held on 30th March, 2015 to evaluate the performance of Non-Independent Directors, Chairperson of the Company and the Board as a whole.

The evaluation was done by way of discussions on the performance of the Non- Independent Directors, Chairperson and Board as a whole.

A policy on the performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of non-executive directors and executive directors have been formulated by the Company.

14. AUDITORS AND AUDITORS'' REPORT:

Statutory Auditors:

At the Annual General Meeting held on 24th September, 2014, M/s. S.C. Vasudeva & Company, Chartered Accountants, New Delhi were appointed as Statutory Auditors of the Company to hold office till the conclusion of 44th Annual General Meeting of the Company. In terms of provisions of Section 139 (1) of the Companies Act, 2013, the appointment of Statutory Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. S.C. Vasudeva & Company as Statutory Auditors is placed for ratification by the members.

Further, the Statutory Auditors of the Company have submitted Auditors'' Report on the accounts of the Company for the accounting year ended 31st March, 2016. This Auditors'' Report is self-explanatory and requires no comments.

Secretarial Auditor:

M/s. B.K. Gupta & Associates, Company Secretary in Practice, were appointed as Secretarial Auditors of the Company by the Board of Directors of the Company in their meeting held on 8th May, 2015 for the financial year 2015-16.

The Secretarial Auditors of the Company have submitted their Report in Form No. MR-3 as required under Section 204, of the Companies Act, 2013 for the financial year ended 31st March, 2016. This Report is self- explanatory and requires no comments. The Secretarial Audit Report forms part of this report as Annexure III.

Cost Auditor:

The Board of Directors has appointed M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, as the Cost Auditors of the Company to conduct Cost Audit of the Accounts for the financial year ended 2016-17. However, as per provisions of Section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014, the remuneration to be paid to the Cost Auditors is subject to ratification by members at the Annual General Meeting. Accordingly, the remuneration to be paid to M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, for financial year 2016-17 is placed for ratification by the members.

15. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:

Six meetings of the Board were held during the year.

16. AUDIT COMMITTEE DISCLOSURES:

Composition:

The Audit Committee consists of Mr. Prafull Anubhai, Independent Director, Dr. S.K. Bijlani, Independent Director, Mr. Shravan Talwar, Independent Director, Mr. D.B. Jain, Independent Director, Mr. A.K. Kundra, Independent Director and Mr. D.L. Sharma, Director. Mr. Prafull Anubhai is the Chairman of the Committee and Ms. Karan Kamal Walia is the Secretary of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism:

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Uniform Listing Agreement aims to provide a channel to the employees and Directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Codes of Conduct or policy. The mechanism provides for adequate safeguards against victimisation of employees and Directors to avail of the mechanism and also provide for direct access to the Chairman/ Chairman of the Audit Committee in exceptional cases.

The Policy on Vigil Mechanism and whistle blower policy as approved by the Board may be accessed on the Company''s website at the link: http://www.vardhman.com/user_files/20b9bcdbd2cRs.01fde3e8e7d39 2d93573769de1941436265078.pdf.

17. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Corporate Governance Clauses of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to the report on Corporate Governance.

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major emphasis in our Company. Efforts are made to optimise the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are annexed hereto and form part of this report as Annexure IV.

19. ANNUAL RETURN:

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 for the financial year 2015-16 in Form MGT-9 is annexed hereto and form part of this report as Annexure V.

20. HUMAN RESOURCES /INDUSTRIAL RELATIONS:

The Company continues to lay emphasis on building and sustaining an excellent organisation climate based on human performance. Performance management is the key word for the Company. During the year the Company employed around 20,711 employees.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of the various plants.

21. PARTCULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The disclosures in respect of managerial remuneration as required under section 197(12) read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and form part of this report.

A statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5 (2) and 5 (3) Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and form part of this report.

In terms of section 197(14) of the Companies Act, 2013, the Company does not have any Holding Company. However, the details regarding remuneration or commission received from any holding or subsidiary company of company by any Managing or Whole Time Director is annexed hereto and form part of this report.

All the above details are provided in Annexure VI.

22. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to provisions of Section 134 (5) of the Companies Act, 2013 the Board hereby submit its Responsibility Statement:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures;

b. Appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2016 and of the profit of the Company for the year ended on 31st March, 2016;

c. Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The annual accounts have been prepared on a going concern basis;

e. The Internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. The proper systems has been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

23. GENERAL DISCLOSURES:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

a. Details relating to deposits covered under Chapter V of the Act.

b. Issue of equity shares with differential rights as to dividend, voting or otherwise.

c. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

VARDHMAN TEXTILES LIMITED EMPLOYEE STOCK OPTION PLAN, 2016:

The Board of Directors in their meeting held on 9th May, 2016 approved introduction of an equity based compensation scheme called "Vardhman Textiles Limited Employee Stock Option Plan 2016" for its eligible employees subject to approval of shareholders of the Company in the ensuing Annual General Meeting of the Company. The Board has delegated necessary power to the Nomination and Remuneration Committee to implement and administer the Plan once approved by the shareholders of the Company.

24. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

For and On Behalf of The Board

Place: Ludhiana (S.P. Oswal)

Dated: 9th May, 2016 Chairman & Managing Director

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Mar 31, 2015

Dear Members,

The Directors of your Company have pleasure in presenting their 42nd Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended, 31st March, 2015.

1. FINANCIAL RESULTS:

The financial results for the year are as under:

(Rs. in crore)

(PARTICULARS 2014-2015 2013-2014

Revenue from operations (Net) 5,742.03 5,171.31

Profit before Depreciation, Interest & Tax (PBDIT) 1,099.65 1,325.34

Interest and Financial expenses 121.54 151.83

Profit before Depreciation and Tax (PBDT) 978.11 1,173.51

Depreciation 488.85 294.13

Profit before Tax (PBT) 489.27 879.38

Provision for Tax - Current 186.00 188.50

- Deferred Tax (Net of Adjustment) (55.84) 39.00

Profit for the period after tax (PAT) 359.11 651.88

Earnings per share (Rs.)

- Basic 56.42 102.41

-Diluted 56.42 102.41

Dividend per share (Rs.) 10.00 11.00

2. FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:

Production & Sales Review:

During the year under review, your Company has registered Revenue from Operations of Rs.5,742.03 crore as compared to H5,171.31 crore in the previous year. The export of the Company increased from Rs.2,007.91 crore to Rs.2,442.48 showing a increase of 21.64% over the previous year. The business wise performance is as under:-

a) Yarn:

The production of Yarn increased from 1,68,285 MT to 1,91,046 MT during the year 2014-15. The sales revenue of yarn increased from H2,980.01 crore to Rs.3,365.60 crore during the year under review showing an increase of 12.94%.

b) Fabric:

During the year, the production of grey fabric increased from 154 million meter to 170 million meter, showing an increase of 10.39% over the previous year. The production of processed fabric increased from 107 million meter to 110 million meter. The sales revenue of the fabric (grey and processed) also increased from Rs.1,885.25 crore to H2,032.48 crore showing an increase of 7.81% over the previous year.

Profitability:

The Company earned profit before depreciation, interest and tax of Rs.1,099.65 crore as against Rs.1,325.34 crore in the previous year. After providing for depreciation of H488.85 crore (Previous Year Rs.294.13 crore), interest of H121.54 crore (Previous Year Rs.151.83 crore), provision for current tax H186.00 crore (Previous Year H188.50 crore), deferred tax (net of adjustments) H(55.84) crore (Previous Year H39.00 crore), the net profit from operations worked out to H359.1 1 crore as compared to H651.88 crore in the previous year.

Resources Utilisation:

a) Fixed Assets:

The net fixed assets (including Capital work-in-progress) as at 31st March, 2015 were H2,573.05 crore as compared to H2,859.26 crore in the previous year.

b) Current Assets:

The current assets as on 31st March, 2015 were H2,960.84 crore as against Rs.3,408.75 crore in the previous year. Inventory level was at H1,636.73 crore as compared to the previous year level of H1871.54 crore.

Financial Conditions & Liquidity:

The Company enjoys a rating of "AA/stable" from Credit Rating Information Services of India (CRISIL) for long term borrowings and "A1 " for short term borrowings respectively. Management believes that the Company's liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:

(Rs. in crore)

(PARTICULARS 2014-2015 2013-2014

Cash and Cash equivalents:

Beginning of the year 52.75 26.63

End of the year 175.55 52.75

Net cash provided (used) by:

Operating Activities 1,210.89 705.66

Investing Activities (144.18) (677.47)

Financial Activities (943.91) (2.07)

3. DIVIDEND:

The Board of Directors of your Company has recommended dividend of Rs.10.00/- per share on the Fully Paid-up Equity Shares of the Company.

4. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

In terms of Section 125 of the Companies Act, 2013, unclaimed or unpaid Dividend relating to the financial year 2007-08 is due for remittance by the end of September, 2015 to the Investor Education and Protection Fund established by the Central Government.

5. CONSOLIDATED FINANCIAL STATEMENT:

In accordance with the Companies Act, 2013 and Accounting Standard (AS)- 21 on consolidated Financial Statements read with AS- 23 on Accounting for Investments in Associates and AS- 27 on Financial Reporting of Interests in Joint Ventures, the Audited Consolidated Financial Statement is provided in the Annual Report.

6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

During the year under review, no Company has become or ceased to be Company's subsidiaries, joint ventures or associate companies. Further, the Company does not have any material subsidiary. The Company has following subsidiaries and associate companies, the details of their financials for 2014-15 are given below:

VMT Spinning Company Limited (VMT)

This subsidiary of the Company is a Joint Venture with Marubeni Corporation and Marubeni Hong Kong and South China Limited of Japan. The Revenue from operations of the Company has increased to Rs.167.23 crore from Rs.157.65 crore in the last year. The Company earned a net profit of Rs.2.79 crore as against the profit of Rs.17.04 crore in the previous year administering a decrease of 83.63% due to depressed margins. Out of the total present paid-up capital of Rs.20.70 crore, your Company holds 89.44%. The Board of Directors of VMT has recommended a dividend @ 10% for the year 2014-15.

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged in the business of investments in shares etc. The earnings of the Company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the year, the Company has earned a net profit of Rs.3.07 crore.

Vardhman Acrylics Limited (VAL)

This subsidiary of the Company is engaged in the business of manufacturing of Acrylic Fibre. Presently, the Company holds 70.75% shares in this subsidiary. During the Financial Year 2014-15, VAL recorded Revenue from operations of Rs.498.08 crore (including Trading of goods of Rs.153.08 crore) as against Rs.468.49 crore (including trading of goods Rs.133.97 crore). The net profit for the year has decreased to Rs.33.42 crore from Rs.43.67 crore in the previous year administering a decrease of 23.47%. The Board of Directors of VAL has recommended a dividend @ 10% for the year 2014-15.

Vardhman Yarns & Threads Limited (VYTL)

This subsidiary of the Company, a Joint Venture with American & Efird Global LLC. (A&E), is engaged in the business of Threads Manufacturing and Distribution. The Company has a Joint Venture partnership of 51:49 with A&E, which is the second largest player in Threads Manufacturing and Distribution across the world. During the year under review, the Revenue from Operations were Rs.696.62 crore as against Rs.643.05 crore in the previous year registering an increase of 8.33%. The Net Profit for the year was Rs.72.04 crore as compared to Rs.69.99 crore during last year registering an increase of 2.93%. This has been possible because of increase in production and sales revenue in all the verticals i.e. Consumers, Industrial and Specialty products. The Board of Directors of this Company has recommended a dividend @ 60% on it's paid up equity share capital for the year 2014-15.

Vardhman Nisshinbo Garments Company Limited (VNGL)

This subsidiary of the Company is a Joint Venture partnership of 51:49 with Nisshinbo Textiles Inc., Japan for manufacturing world class men's shirts. During the year, the Revenue from Operations of the Company was Rs.47.07 crore as compared to Rs.36.94 crore in the previous year. The Company earned a Net Profit of Rs.0.15 crore as against a net loss of Rs.4.13 crore in the previous year.

Vardhman Special Steels Limited (VSSL)

Vardhman Special Steels Limited (VSSL) is an Associate Company of the Company.The Company holds 31.39% shares of VSSL. During the year, the Revenue from Operations of the Company was Rs.661.60 crore as compared to Rs.370.60 crore in the previous year. The Company incurred a Net loss of Rs.15.13 crore as against a net loss of Rs.9.42 crore in the previous year.

Vardhman Spinning & General Mills Limited (VSGM)

Vardhman Spinning & General Mills Limited (VSGM) is an Associate Company of the Company. The Company holds 50% shares of VSGM. It is a trading Company dealing in trading of Cotton and Fibre. During the year, the Company has not traded any goods. So, the Revenue from Operations is Nil for the financial year 2014-15. The Company incurred a Net Loss of Rs.38,062.00 as against a net loss of Rs.26,155.68 in the previous year.

7. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statements relate and the date of this report.

8. CORPORATE SOCIAL RESPONSIBILITY:

Your Company is committed to and fully aware of its Corporate Social Responsibility (CSR), the guidelines in respect of which were more clearly laid down in the recently overhauled Companies Act. The Company's vision is to pursue a corporate strategy that enables shareholder value enhancement and societal value creation in a mutually reinforcing and synergistic manner.

The Corporate Social Responsibility Committee of the Company has formulated and recommended to the Board, a Corporate Social Responsibility (CSR) Policy indicating the activities to be undertaken by the Company, which has been approved by the Board.

The CSR policy may be accessed on the Company's website at the link: http://www.vardhman.com/user_files/ d622b1c8d626fabfcecf09e145cb1b4e9f4884761436264563.pdf.

The Company has identified following thrust areas for CSR:-

* PROMOTION OF EDUCATION: To continue our endeavour for promoting education by setting up schools, colleges to deliver high quality education to students of all strata of society including wards of employees of the Company.

* ENVIRONMENT PROTECTION AND ENERGY CONSERVATION: To protect environment and to sustain and continuously improve standards of Environment, Health and Safety through the collective endeavour of Company and its employees at all levels towards attaining world class standards.

DEVELOPMENT OF HUMAN CAPITAL: To encourage the development of human capital through skills development, vocational training programmes.

RURAL DEVELOPMENT: To contribute to development in rural areas through agricultural research and knowledge sharing, promoting superior farm practices, improving cotton production, productivity and quality and other agri- extension practices such as soil and moisture conservation and watershed management etc.

OTHER INITIATIVES:

* To contribute to empowering women economically, supplementing primary and secondary education and participating in rural capacity building programmes and such other schemes.

* To respond to emergency situations & disasters by providing timely help to affected victims and their families.

* Any other project/ programme pertaining to activities listed in Schedule VII of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014.

During the year, the Company has spent Rs.6.00 crores on CSR activities.

The disclosures related to CSR activities pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 9 of Companies (Accounts) Rules, 2014 and Companies (Corporate Social Responsibility) Rules, 2014 is annexed hereto and form part of this report as Annexure - I.

9. RISK MANAGEMENT:

The Board of Directors in their meeting held on 7th November, 2014 had constituted Risk Management Committee of the Company. The Committee has formulated Risk Management Policy of the Company which has been subsequently approved by the Board of Directors of the Company. The aim of risk management policy is to maximise opportunities in all activities and to minimise adversity. The policy includes identifying types of risks and its assessment, risk handling, monitoring and reporting, which in the opinion of the Board may threaten the existence of the Company.

The Risk Management policy may be accessed on the Company's website at the link: http://www.vardhman. com/user_f iles/a4c0a8b00e407cd 5075 53ea7d b7 f06e89de1272a1436265025. pdf

10. INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES:

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the provisions of Clause 49 of the Listing Agreement.

The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: http://www.vardhman.com/user_files/96c45534e3ab096d 9bc682f8eebade0344f915151436264609.pdf

Your Directors draw attention of the members to Note 42 to the standalone financial statement which sets out related party disclosures.

12. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013: Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in the standalone financial statement (Please refer to Note 14, 15, 16 and 17 to the standalone financial statement).

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. Neeraj Jain, Director of the Company, retires by rotation at the conclusion of the forthcoming Annual General Meeting, pursuant to the provisions of the Articles of Association of the Company and being eligible, offers himself for re-appointment. The Board recommended his re-appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.

During the year under review, the members approved the appointments of Mr. Prafull Anubhai, Mr. A.K. Purwar, Dr. S.K. Bijlani, Mr. A.K. Kundra, Mr. Shravan Talwar and Mr. D.B. Jain as Independent Directors of the Company who are not liable to retire by rotation. The members also re-appointed Mr. S.P. Oswal as Chairman & Managing Director of the Company. Mr. Sachit Jain and Mr. Neeraj Jain were appointed as Joint Managing Directors of the Company.

The following persons were appointed as KMPs of the Company:

Sr.No. Whole Time Key Persent position in Managerial personnel Company

1. Mr. S.P. Oswal Managing Director (MD)

2. Ms. Karan Kamal Walia Company Secretary (C.S.)

3. Mr. Rajeev Thapar Chief Financial Officer (CFO)

Declaration under Section 149(6):

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof.

Company's Policy relating to Directors appointment, payment of remuneration and discharge of their duties:

The Nomination & Remuneration Committee of the Company has formulated the Nomination & Remuneration Policy on Director's appointment and remuneration includes the criteria for determining qualifications, positive attributes, independence of a director and other matters as provided under Section 178(3) of the Companies Act, 2013.

The Nomination & Remuneration Policy is annexed hereto and form part of this report as Annexure - II.

Familiarisation programmes for Board Members:

The Board members are provided with necessary documents/ brochures, reports and internal policies to enable them to familiarise with the Company's procedures and practices. Periodic presentations are made at the Board and Board Committee Meetings on business and performance updates of the Company, global business environment, business strategy and risks involved. Quarterly updates on relevant statutory changes and landmark judicial pronouncements encompassing important laws are regularly circulated to the Directors.

Annual Evaluation of the Board Performance:

The meeting of Independent Directors of the Company was held on 30th March, 2015 to evaluate the performance of Non- Independent Directors, Chairman of the Company and the Board as a whole for the financial year 2014-15. The evaluation was done by way of discussions on the performance of the Non- Independent Directors, Chairman and Board as a whole and the minutes of the meeting was submitted to the Chairman of the Company.

A policy on the performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of Non- Executive Directors and Executive Directors have been formulated by the Company.

14. AUDITORS AND AUDITORS REPORT:

Statutory Auditors:

At the Annual General Meeting held on 24th September, 2014, M/s. S.C. Vasudeva & Company, Chartered Accountants, New Delhi were appointed as Statutory Auditors of the Company to hold office till the conclusion of 44th Annual General Meeting of the Company. In terms of provisions of Section 139 (1) of the Companies Act, 2013, the appointment of Statutory Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. S.C. Vasudeva & Company as Statutory Auditors is placed for ratification by the members.

Further, the Statutory Auditors of the Company have submitted Auditors' Report on the Accounts of the Company for the accounting year ended 31st March, 2015. This Auditors' Report is self-explanatory and requires no comments.

Secretarial Auditor:

M/s. B.K. Gupta & Associates, Company Secretary in Practice, were appointed as Secretarial Auditors of the Company by the Board of Directors of the Company in their meeting held on 23rd May, 2014 for the financial year 2014-15.

The Secretarial Auditors of the Company have submitted their Report in Form No. MR-3 as required under Section 204, of the Companies Act, 2013 for the financial year ended 31st March, 2015. This Report is self-explanatory and requires no comments. The Report forms part of this report as Annexure - III.

Cost Auditor:

The Board of Directors has appointed M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, as the Cost Auditors of the Company to conduct Cost Audit of the Accounts for the financial year ended 2015-16. However, as per provisions of Section 148 of the Companies Act, 2013, read with Companies (Cost Records and Audit) Rules, 2014, the remuneration to be paid to the Cost Auditors is subject to ratification by members at the Annual General Meeting. Accordingly, the remuneration to be paid to M/s Ramanath Iyer & Company, Cost Accountants, New Delhi, for financial year 2015-16 is placed for ratification by the members.

15. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:

Four meetings of the Board were held during the year.

16. AUDIT COMMITTEE DISCLOSURES:

Composition:

The Audit Committee consists of Mr. Prafull Anubhai, Independent Director, Dr. S.K. Bijlani, Independent Director, Mr. Shravan Talwar, Independent Director, Mr. D.B. Jain, Independent Director, Mr. A.K. Kundra, Independent Director and Mr. D.L. Sharma, Non-Independent Director. Mr. Prafull Anubhai is the Chairman of the Committee and Ms. Karan Kamal Walia is the Secretary of the Committee. All the recommendations made by the Audit Committee were accepted by the Board.

Vigil Mechanism:

The Vigil Mechanism of the Company, which also incorporates a Whistle Blower Policy in terms of the Listing Agreement aims to provide a channel to the employees and Directors to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of the Codes of conduct or policy. The mechanism provides for adequate safeguards against victimisation of employees and Directors to avail of the mechanism and also provide for direct access to the Chairman/ Chairman of the Audit Committee in exceptional cases.

The Policy on Vigil Mechanism and Whistle Blower Policy as approved by the Board may be accessed on the Company's website at the link: http://www.vardhman.com/userfiles/20b9bcdbd2cc01fde3e 8e7d392d93573769de1941436265078.pdf.

17. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Corporate Governance Clause of the Listing Agreement is annexed to the report on Corporate Governance.

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major emphasis in our Company. Efforts are made to optimise the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, are annexed hereto and form part of this report as Annexure - IV.

19. ANNUAL RETURN:

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 for the financial year 2014-15 in Form No. MGT-9 is annexed hereto and form part of this report as Annexure - V.

20. HUMAN RESOURCES /INDUSTRIAL RELATIONS:

The Company continues to lay emphasis on building and sustaining an excellent organisation climate based on human performance. Performance management is the key word for the Company. During the year, the Company employed around 17,393 employees on permanent rolls.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of the various plants.

21. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The disclosures in respect of managerial remuneration as required under section 197(12) read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and form part of this report.

A statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in Rule 5 (2) and 5 (3) Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed hereto and form part of this report.

In terms of section 197(14) of the Companies Act, 2013, the Company does not have any Holding Company. However, the details regarding remuneration or commission received from any holding or subsidiary company of Company by any Managing or Whole Time Director is annexed hereto and form part of this report.

All the above details are provided in Annexure - VI.

22. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to provisions of Section 134 (5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:—

a. in the preparation of the annual accounts, the applicable accounting standards have been followed along with the proper explanation relating to material departures;

b. appropriate accounting policies have been selected and applied consistently and have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit of the Company for the year ended on 31st March, 2015;

c. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the annual accounts have been prepared on a going concern basis;

e. the internal financial controls has been laid down to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f. the proper systems has been devised to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

22. GENERAL DISCLOSURES:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Details relating to deposits covered under Chapter V of the Act.

2. Issue of equity shares with differential rights as to dividend, voting or otherwise.

3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

4. No significant or material orders were passed by the

Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

24. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

FOR AND ON BEHALF OF THE BOARD

Place : Ludhiana (S.P. Oswal) Dated: 8th May, 2015 Chairman & Managing Director

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Mar 31, 2014

Dear Members,

The Directors of your Company have pleasure in presenting their 41st Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended, 31st March, 2014.

Paticular 2013-14 2012-13 (Rsin crore) (Rsin crore)

Revenue from operations (Net) 5,171.31 4,159.71

Profit before Depreciation, Interest & Tax (PBDIT) 1,325.33 883.04

Interest and Financial expenses 151.83 174.35

Profit before Depreciation and Tax (PBDT) 1,173.51 708.69

Depreciation 294.13 253.86

Profit before Tax (PBT) 879.38 454.84

- Provision for Tax-Current 188.50 106.82

- Deferred Tax (Net of Adjustment) 39.00 24.29

Profit for the periodafter tax (PAT) 651.88 323.73

Add: Corporate Dividend Tax written back 1.79 1.21

Balance brought forward 551.90 306.64

Balance available forappropriation 1,205.56 631.58

Appropriations:

Proposed dividend on:

- Equity shares 70.02 38.19

- Corporate Dividend Tax 11.90 6.49

Transfer to General Reserve 66.00 35.00

Closing Balance of surplus i.e. Balance in Statement of 1,057.64 551.90 Profit &Loss

Earnings per share (Rs)

-Basic 102.41 50.86

-Diluted 102.41 50.86

Dividend per share (Rs) 11.00 6.00

A) Financial Analysis and Review of Operations:

Production & Sales Review:

During the year under review, your Company has registered Revenue from operations (turnover) of Rs.5,171.31 crore as compared to Rs.4,1 59.71 crore showing an increase of 24.32% over previous year. The export of the Company increased from Rs.1,599.59 crore to Rs.2,007.91 showing an increase of 25.53% over the previous year. The business wise performance is as under:-

a) Yarn:

The production of Yarn increased from 148,003 MT to 168,285 MT during the year 2013-14. The sales revenue of yarn increased from Rs.2,523.46 crore to Rs.2,980.06 crore during the year under review showing an increase of 18.09%.

b) Fabric:

During the year, the production of fabric (grey and processed) increased from 219 million meter to 261 million meter, showing an increase of 19.18% over the previous year. The sales revenue of the fabric (grey and processed) also increased from Rs.1,366.96 crore to Rs.1,885.27 crore showing an increase of 37.92% over the previous year.

Profitability:

The Company earned profit before depreciation, interest and tax of Rs.1,325.33 crore as against Rs.883.04 crore in the previous year. After providing for depreciation of Rs.294.13 crore (Previous year Rs.253.86 crore), interest of Rs.151.83 crore (Previous Year Rs.174.35 crore), provision for tax Rs.188.50 crore (Previous year Rs.106.82 crore), provision for deferred tax (net of adjustments) Rs.39.00 crore (previous year Rs.24.29 crore), the net profit from operations worked out to Rs.651.88 crore as compared to Rs.323.72 crore in the previous year, an increase of 101.37%.

Resources Utilisation:

a) Fixed Assets:

The fixed assets (including work-in-progress) as at 31st March, 2014 were Rs.2,859.26 crore as compared to Rs.2,548.41 crore in the previous year.

b) Current Assets:

The current assets as on 31st March, 2014 were Rs.3,408.75 crore as against Rs.2,884.65 crore in the previous year.

Inventory level was at Rs.1871.54 crore as compared to the previous year level of Rs.1,499.44 crore.

Financial Conditions & Liquidity:

The Company enjoys a rating of "AA/stable" from Credit Rating Information Services of India (CRISIL) for long term borrowings and "A1 " for short term borrowings respectively. Management believes that the Company''s liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:-

paticular 2013-14 2012-13 (Rsin crore) (Rsincrore)

Cash and Cash equivalents:

Beginning of the year 26.63 58.42

End of the year 52.75 26.63

Net cash provided (used) by:

Operating Activities 718.30 269.18

Investing Activities (690.11) (468.99)

Financial Activities (2.07) 168.03

B) Internal control and adequacy

The Company maintains a system of well-established policies and procedures for internal control of operations and activities. Its internal control systems and procedures are designed to enable reliable reporting of financial statements, reporting timely feedback on achievements of operational/strategic goals and ensure compliance with laws and regulations. The Company''s overall system of internal control is adequate given the size and nature of operations and effective implementation of internal control self-assessment procedures ensure compliance with policies, plans and statutory requirements. Internal Audit in the organisation is an independent appraisal activity and it measures the efficiency, adequacy and effectiveness of other controls in the organisation. All significant issues are brought to the attention of the Audit Committee of the Board.

C) Human Resources /Industrial Relations:

The Company continues to lay emphasis on building and sustaining an excellent organisation climate based on human performance. Performance management is the

key word for the Company. During the year the Company employed around 26,000 employees.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of the various plants.

2. Subsidiaries:

The Company has following subsidiary companies the details of profitability of which are given below: -

VMT Spinning Company Limited (VMT)

The business of this subsidiary of the Company which is a Joint Venture with Marubeni Corporation and Marubeni Hong Kong and South China Limited of Japan has shown a lot of improvement. The Revenue from operations of the Company has increased to Rs.1 57.65 crore from Rs.147.45 crore in the last year. The Company earned a net profit of Rs.17.04 crore as against the profit of Rs.5.45 crore in the previous year administering an increase of 212.66%. Out of the total present paid-up capita of Rs.20.70 crore, your Company holds 89.44 %. The Board of Directors of VMT has recommended a dividend @ Rs.1.50 per share for the year 2013-14.

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged with the business of investments in the shares etc. The earnings of the Company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the year, the Company has earned a net profit of Rs.2.14 crore.

Vardhman Acrylics Limited (VAL)

Vardhman Acrylics Limited (VAL) is another subsidiary of the Company which is engaged in the business of manufacturing of Acrylic Fibre. Presently the Company holds 70.01% shares in this subsidiary. During the Financial Year 2013-14, VAL recorded Revenue from operations of Rs.468.49 crore (includes Trading of goods of Rs.133.97 crore) as against Rs.436.49 crore (Trading of goods Rs.134.72 crore). The net profit for the year has increased to Rs.43.67 crore from Rs.24.40 crore in the previous year administering an increase of 78.98%.

Vardhman Yarns & Threads Limited (VYTL)

This subsidiary of the Company, a Joint Venture with American & Efird (A&E) global LLC, USA, is engaged in the business of

Threads Manufacturing and Distribution. The Company has a joint venture partnership of 51:49 with A&E, which is the second largest player in Threads Manufacturing and Distribution across the world. During the year under review, the Revenue from Operations were Rs.643.05 crore as against Rs.537.80 crore in the previous year registering an increase of 19.57%. The Net Profit for the year was Rs.69.99 crore as compared to Rs.43.15 crore during last year registering an increase of 62.20%. This has been possible because of increase in production and sales revenue in all the verticals i.e. Consumers, Industrial and Specialty products. The Board of Directors of this Company has recommended a dividend @ Rs.3.50 per share on it''s paid up equity share capital, for the year 2013-14.

Vardhman Nisshinbo Garments Company Limited (VNGL)

This subsidiary of the Company which is a Joint Venture partnership of 51:49 with Nisshinbo Textiles Inc., Japan for manufacturing world class men''s shirts. During the year, the Revenue from Operations of the Company was Rs.36.60 crore as compared to Rs.17.66 crore in the previous year. The Company incurred a net loss of Rs.4.13 crore as against Rs.4.86 crore in the previous year. This is on account of lower productivity, labour turnover and lack of skilled workers. The Company is expected to stabilise its business operations during the next financial year.

3. Dividend:

The Board of Directors of your Company has recommended dividend of Rs.6/- per share on the Fully Paid-up Equity Shares of the Company. Further to commemorate the Golden Jubilee Year of commencement of operations of the Group, the Board also recommended a special dividend of Rs.5/- per share on fully paid up equity shares of the Company.

4. Directors:

The nomination of Mr. S. Padmanabhan has been withdrawn by IDBI Bank Limited and Mr. Suresh Khatanhar has been nominated as the Director of the Company by IDBI Bank Limited w.e.f 12th April, 2014.

Mr. Sachit Jain, Executive Director of the Company, retire by rotation at the conclusion of the forthcoming Annual General Meeting, pursuant to the provisions of the Articles of

Association of the Company and being eligible, offer himself for re-appointment. The Board recommended his appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.

5. Corporate Governance:

The Company has in place a system of Corporate Governance. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Corporate Governance Clause of the Listing Agreement is annexed to the report on Corporate Governance.

6. Auditors:

M/s. S.C. Vasudeva & Company, Chartered Accountants, New Delhi, Auditors of the Company, retire at the conclusion of the forthcoming Annual General Meeting of the Company.

7. Auditors'' Report:

The Statutory Auditors of the Company have submitted Auditors'' Report on the accounts of the Company for the accounting year ended March 31, 2014. This Auditors'' Report is self -explanatory and requires no comments.

8. Cost Audit Report:

The Cost Auditors'' Report for the financial year 2013-14 will be forwarded to the Central Government as required under law.

9. Statement Of Particulars Of Employees:

A Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 is enclosed and forms part of this report.

10. Conservation of Energy, Technology absorption, Foreign Exchange Earnings and Outgo:

Energy conservation continues to be an area of major emphasis in your Company. Efforts are made to optimise the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per

Section 217(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are annexed hereto and form part of this report.

11. Directors'' Responsibility Statement:

Pursuant to Section-217 (2AA) of the Companies Act, 1956, the Directors confirm that in the preparation of the annua accounts, the applicable accounting standards have been followed;

a. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2014 and of the profit of the Company for the year ended on 31st March, 2014;

b. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

c. the annual accounts have been prepared on a going concern basis.

12. Acknowledgement:

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

For and on Behalf of the Board

Place: Mumbai (S. P. Oswal) Dated : 23rd May, 2014 Chairman & Managing Director

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Mar 31, 2013

Dear Members,

The Directors of your Company have pleasure in presenting their 40th Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended 31st March, 2013.

1. FINANCIAL RESULTS:

The Financial Results for the year are as under :- (Rs. in Crore)

PARTICULARS 2012-2013 2011-2012

Revenue from operations (Net) 4,159.71 3,918.00

Profit before Depreciation, Interest & Tax (PBDIT) 883.05 553.35

Interest and Financial expenses 174.35 173.22

Profit before Depreciation and Tax (PBDT) 708.70 380.13

Depreciation 253.86 234.67

Profit before Tax (PBT) 454.84 145.46

Provision for Tax - Current (Including tax adjustment of previous year) 106.82 29.75

- Deferred Tax (Net of Adjustment) 24.29 6.04

Tax adjustment of previous years - (0.002)

Profit for the period after tax (PAT) 323.73 109.67

Add: Corporate Dividend Tax written back 1.21 1.38

Balance brought forward 306.64 243.88

Balance available for appropriation 631.58 354.93

Appropriations:

Proposed dividend on:

-Equity shares 38.19 28.64

-Corporate Dividend Tax 6.49 4.65

Transfer to General Reserve 35.00 15.00

Closing Balance of surplus i.e. Balance in Statement of Profit & Loss 551.90 306.64

Earnings per share (Rs.)

- Basic 50.86 17.23

- Diluted 50.86 17.23

Dividend per share (Rs.) 6.00 4.50

2. SUBSIDIARIES:

The Company has following subsidiary companies, the details of financial performance of which are given below:-

VMT Spinning Company Limited (VMT)

The business of this subsidiary of the Company which is a Joint Venture with Marubeni Corporation, Marubeni HongKong and South China Limited and Toho Tenax Limited of Japan has improved as compared to last year. The Revenue from operations of VMT has increased to Rs. 147.45 crore from Rs. 144.51 crore in the last year. The Company earned a net profit of Rs. 5.45 crore as against net loss of Rs. 1.87 crore in the previous year due to better margins available. Out of the total present paid-up capital of Rs. 20.70 crore, your Company holds 73.33 %. The Board of Directors of VMT has recommended a dividend @ 10% on its paid up equity share capital for the year 2012-13.

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged with the business of investments in shares, bonds, debentures etc. The earnings of the company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the year, VTL has earned a net profit of Rs. 2.06 crore.

Vardhman Acrylics Limited (VAL)

Vardhman Acrylics Limited (VAL) is another subsidiary of the Company which is engaged in the business of manufacturing of Acrylic Fibre. The Company held 67.37% shares in VAL as at the end of the year under review. During the Financial Year 2012-13, VAL recorded Revenue from operations of Rs. 436.49 crore (including Trading of goods of Rs. 134.72 crore) as against Rs. 390.14 crore (Including Trading of goods Rs. 88.04 crore) in corresponding period last year. The net profit for the year has decreased marginally to Rs. 24.40 crore from Rs. 24.49 crore in the previous year. During the year, VAL bought back and extinguished 13,906,160 of its Equity Shares of Rs. 10/- each out of maximum of 20,000,000 Equity shares as approved by its Board of Directors.

Vardhman Yarns & Threads Limited (VYTL)

This subsidiary of the Company, a Joint Venture with American & Efird Inc. (A&E), is engaged in the business of Threads Manufacturing and Distribution. VYTL is a joint venture partnership of 51:49 with A&E, which is the second largest player in Threads Manufacturing and Distribution across the world. During the year under review, the Revenue from Operations were Rs. 540.54 crore as against Rs. 464.69 crore in the previous year registering an increase of 16.32%. The Net Profit for the year was Rs. 43.15 crore as compared to Rs. 39.70 crore during last year recording an increase of 8.69%. This has been possible because of increase in production and sales revenue in all the verticals i.e. Consumers, Industrial and Specialty products. The Board of Directors of VYTL has recommended a dividend @ 30%, on it''s paid up equity share capital, for the year 2012-13.

Vardhman Nisshinbo Garments Company Limited (VNGL)

This subsidiary of the Company which is a Joint Venture partnership of 51:49 with Nisshinbo Textiles Inc., Japan for manufacturing world class men''s shirts. During the year, the Revenue from Operations of VNGL was Rs. 17.66 crore as compared to Rs. 7.43 crore in the previous year. VNGL incurred a net loss of Rs. 4.86 crore as against Rs. 4.24 crore in the previous year. This is on account of lower productivity, labour turnover and lack of skilled workers. VNGL is expected to stabilize its business operations during the next financial year.

3. DIVIDEND:

The Board of Directors of your Company has recommended dividend of Rs. 6.00/- per share on the Fully Paid-up Equity Shares of the Company.

4. DIRECTORS:

Mr. A.K. Purwar and Mr. D.L. Sharma, Directors of the Company, retire by rotation at the conclusion of the forthcoming Annual General Meeting, pursuant to the provisions of Article 108 of the Articles of Association of the Company and being eligible, offer themselves for re-appointment. The Board recommended their appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.

5. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Corporate Governance Clause of the Listing Agreement(s) is annexed to the report on Corporate Governance.

6. AUDITORS:

M/s. S.C. Vasudeva & Company, Chartered Accountants, New Delhi, Auditors of the Company, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

7. AUDITORS'' REPORT:

The Statutory Auditors of the Company have submitted Auditors'' Report on the accounts of the Company for the accounting year ended March 31, 2013. This Auditors'' Report is self -explanatory and requires no comments.

8. COST AUDITORS:

The Board of Directors has appointed M/s. Ramanath Iyer & Company, Cost Accountants, New Delhi as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956 read with Cost Audit Rules, 2011 for the year 2013- 14. The Cost Auditors'' Report for the financial year 2012-13 will be forwarded to the Central Government as required under law.

9. STATEMENT OF PARTICULARS OF EMPLOYEES:

A Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 including amendments thereon is enclosed and forms part of this report.

10. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major emphasis in your Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are annexed hereto and form part of this report.

11. DIRECTORS'' RESPONSIBILITY STATEMENT:

Pursuant to Section-217 (2AA) of the Companies Act, 1956, the Directors confirm that in the preparation of the annual accounts, the applicable accounting standards have been followed;

a. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the profit of the Company for the year ended on 31st March, 2013;

b. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

c. the annual accounts have been prepared on a going concern basis.

12. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

FOR AND ON BEHALF OF THE BOARD

(S.P. OSWAL)

PLACE : GURGAON CHAIRMAN &

DATED : 28th May, 2013 MANAGING DIRECTOR

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Mar 31, 2012

The Directors of your Company have pleasure in presenting their 39th Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended, 31st March, 2012.

1. FINANCIAL RESULTS:

The Financial Results for the year are as under (Rs. in Crore)

PARTICULARS 2011-2012 2010-2011

Revenue from operations 3,918.00 3,606.81

Profit before Depreciation, Interest & Tax (PBDIT) 553.36 944.45

Interest and Financial expenses 173.22 109.81

Profit before Depreciation and Tax (PBDT) 380.13 834.64

Depreciation 234.67 226.02

Profit before Tax (PBT) 145.46 608.61

Provision for Tax - Current (Including tax adjustment of previous year) 29.75 112.21

- Deferred Tax 6.04 5.07 (Net of Adjustment)

Tax effect (Premium on redemption of FCCBs) - 10.09

Tax expense of discon tinuing operations - 11.54

Profit after Tax (PAT) 109.67 469.70

Corporate Dividend Tax written back 1.38 1.23

Balance brought forward 243.88 131.36 Adjustment of preceding years tax effect in respect

of premium paid on redemption of FCCB - (25.12)

Balance available for appropriation 354.94 577.17 Appropriations:

Proposed dividend on:

-Equity shares 28.64 28.64

-Corporate Dividend Tax 4.65 4.65

Transfer to General Reserve 150.00 300.00

Closing Balance of Surplus i.e. Balance in Statement of Profit & Loss 306.64 243.89 Earnings per share (Rs.)

- Basic 17.23 78.06

- Diluted 17.23 78.06

Dividend per share (Rs.) 4.50 4.50

3. SUBSIDIARIES:

The Company has following subsidiary companies, the details of profitability of which are given below:-

VMT Spinning Company Limited (VMT)

Business of this subsidiary of the Company which is a Joint Venture with Marubeni Corporation, Marubeni HongKong and South China Limited and Toho Tenax Limited of Japan slumped due to steep fall in cotton prices during the year. The Revenue from operations of the Company has increased to Rs.144.51 crore from Rs.129.17 crore in the last year. The Company incurred a net loss of Rs.1.87 crores as against a net profit of Rs.14.66 crore in the previous year. Out of the total present paid-up capital of Rs. 20.70 crore, your Company holds 73.33%. The Board of Directors of VMT has recommended a dividend @ 5% i.e. Rs. 0.50 per equity share for the year 2011-12.

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged with the business of investments in the shares etc. The earnings of the Company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the year, the Company has earned a net profit of Rs.1.51 crores.

Vardhman Acrylics Limited (VAL)

Vardhman Acrylics Limited (VAL) is another subsidiary of the Company which is engaged in the business of manufacturing of Acrylic Fibre. Presently the Company holds 58.74% shares in this subsidiary. During the Financial Year 2011-12, VAL recorded Revenue from operations of Rs. 390.14 crore as against Rs. 398.87 crore, a fall of 2.19% over the previous year. The net profit for the year has decreased to Rs. 24.49 crore from Rs. 37.64 crore in the previous year.

Vardhman Yarns & Threads Limited (VYTL)

This subsidiary of the Company, a Joint Venture with American & Efird, Global LLC (A&E), is engaged in the business of manufacturing and distribution of Threads. The Company has a joint venture partnership of 51:49 with A&E, which is the second largest global player in Threads manufacturing and distribution. During the year under review, the Revenue from Operations were Rs. 464.69 crore as against Rs. 427.65 crore in the previous year registering an increase of 8.66%. The Net Profit for the year was Rs.39.70 crore as compared to Rs. 49.31 crore during last year. The Board of Directors of this Company has recommended a dividend @ 23% i.e. Rs. 2.30 per equity share for the year 2011-12.

Vardhman Nisshinbo Garments Company Limited (VNGL)

This subsidiary of the Company is a Joint Venture partnership in ratio of 51:49 with Nisshinbo Textiles Inc., Japan for manufacturing world class men's shirts. During the year, the Revenue from Operations of the Company was Rs. 7.43 crore as compared to Rs. 0.01 crore in the previous year. The Company incurred a net loss of Rs. 4.24 crore as against Rs.1.99 crore in the previous year as its operations are still stabilizing.

4. DIVIDEND:

The Board of Directors of your Company has recommended dividend of Rs. 4.50 /- per share on the Fully Paid-up Equity Shares of the Company.

5. DIRECTORS:

Mrs. Suchita Jain, Dr. S.K. Bijlani and Mr. Shravan Talwar, Directors of the Company, retire by rotation at the conclusion of the forthcoming Annual General Meeting, pursuant to the provisions of Article 108 of the Articles of Association of the Company and being eligible, offer themselves for re-appointment. The Board recommended their appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.

6. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Corporate Governance Clause of the Listing Agreement is annexed to the report on Corporate Governance.

7. AUDITORS:

M/s. S.C. Vasudeva & Company, Chartered Accountants, New Delhi, Auditors of the Company, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

8. AUDITORS' REPORT:

The Statutory Auditors of the Company have submitted Auditors' Report on the accounts of the Company for the accounting year ended March 31, 2012. In their report, they have made an observation that loss, if any, on valuation of open derivative options could not be determined by the Company due to certain reasons as specified in Note 36 of the Notes to Financial Statements. The ultimate outcome of these transactions and their effect on these accounts cannot be ascertained at this stage.

As you are aware that a part of revenue of your Company comes from export sales and the Company is also having exposure towards imports and as such Company has foreign currency fluctuation exposure. The Company also hedges its foreign currency fluctuation exposure by way of foreign currency derivative options. The Company has taken various USD/INR options from banks. As at March 31, 2012, there are 10 options (Previous Year 15) against exports and 1 option (Previous Year 5) against Imports having a maturity period up to February, 2016 (Previous Year January 2016). These derivative options are proprietary products of banks which do not have a ready market and are not traceable in the open market. These options are marked to a model, which is bank specific instead of being marked to market. In view of the significant uncertainty associated with the above derivative options, the ultimate outcome of which depends on future events which are not under the direct control of the Company, the resultant gain/loss if any, on such open derivative options cannot be determined at this stage and has accordingly not been accounted for in the books of account. The other points of Auditors' Report are self -explanatory and needs no comments.

9. COST AUDITORS:

The Board of Directors has re-appointed M/s. Ramanath Iyer & Company, Cost Accountants, New Delhi as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956, read with Cost Audit Rules, 2011, for the year 2012-13. The Cost Auditors' Report for the financial year 2011-12 will be forwarded to the Central Government as required under law.

10. STATEMENT OF PARTICULARS OF EMPLOYEES:

A Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 is enclosed and forms part of this report.

11. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major emphasis in your Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are annexed hereto and form part of this report.

12. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section-217 (2AA) of the Companies Act, 1956, the Directors confirm that in the preparation of the annual accounts, the applicable accounting standards have been followed;

a. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended on 31st March, 2012;

b. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

c. the annual accounts have been prepared on a going concern basis.

13. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

FOR AND ON BEHALF OF THE BOARD

(S.P. OSWAL)

PLACE : GURGAON CHAIRMAN &

DATED :9th May, 2012 MANAGING DIRECTOR

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Mar 31, 2011

The Directors of your Company have pleasure in presenting their 38th Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended, 31st March, 2011.

1. FINANCIAL RESULTS:

The Financial Results for the year are as under :- (Rs. in Crore)

PARTICULARS 2010-2011 2009-2010

Turnover 3,636.96 2,767.22

Profit before Depreciation, Interest & Tax (PBDIT) 944.69 594.63

Interest and Financial expenses 109.81 86.73

Profit before Depreciation and Tax (PBDT) 834.88 507.90

Depreciation 226.02 220.87

Profit before Tax (PBT) 608.86 287.02

Provision for Tax - Current 123.75 56.75

- Deferred Tax 4.65 16.51 (Net of Adjustment)

Tax adjustment of previous years 0.66 -

Tax effect (Premium on redemption of FCCBs) 10.09 -

Profit after Tax (PAT) 469.71 213.76

Corporate Dividend Tax written back 1.24 1.95

Balance brought forward 131.35 60.85

Adjustment of preceding years tax effect in respect of premium paid on redemption of FCCB 25.12 -

Balance available for appropriation 577.18 276.56

Appropriations:

Proposed dividend on:

-Equity shares 28.64 17.33

-Corporate Dividend Tax 4.65 2.88

33.29 20.21

Transfer to General Reserve 300.00 125.00

Surplus carried to Balance Sheet 243.89 131.35

577.18 276.56

Earnings per share (Rs.)

- Basic 78.06 37.00

- Diluted 78.06 31.83

Dividend per share (Rs.) 4.50 3.00

2. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A) BUSINESS REVIEW:

The global economy kicked off a sputtering growth in FY 2010-11 with developed economies showing faint signs of revival. The main engine of global growth, the United States, moved into a recovery mode with employment coming off highs & retails sales growing month on month, albeit slightly, and consumer confidence improving. This growth was accompanied by a huge surge in world commodity prices, with the Continuous Commodity Index (CCI) surging more than 42% during the year. This rise was mainly attributed to the $600 billion of Quantitative Easing part Deux (QE2) by the Federal Bank of America which released unprecedented amounts of liquidity. This liquidity got channeled into commodities and prices soared.

This also gave rise to supply side inflation and fast growing economies in Asia bore the brunt. Their economies had barely recovered from the financial crises of FY 2008-09 and raising rates at this juncture would have meant putting a spanner in the way of growth. Most Asian economies therefore held off raising interest rates till the second half of the year and then a series of quick rate hikes followed, more particularly in China & India, who have clearly indicated that they dont mind sacrificing growth at the altar of inflation control. As a result, the earnings growth is expected to be hit in the current fiscal. Further, the QE2 will come to an end in June 2011 and the Fed has no plans of a QE3 as of now. In anticipation, the commodities have already come off their lifetime highs.

Cotton & Yarn:

Cotton prices were buoyed by strong global fundamentals, with US Department of Agriculture (USDA) reports forecasting a 6% y/y reduction in end season stocks to 41.5 million bales (of 480 lbs). This compares with 43.9 million bales (mb) in 2009-10 and 60.5mb in 2008-09.

Although global cotton demand dipped by around 1.3% y/y in 2010-11, import demand from China rose by 37% y/y over the same period. Both developments were mainly due to supply constraints and global price rationing following a 8% decline in Chinas cotton output. China traditionally accounts for 30% of global cotton production. Extremely tight global end-season stocks underpinned prices; the stocks-to-use ratio at 35% will be the tightest since the 1993-94 season.

Global Stock-to-use ratio lowest since 1993-94:

In 2010-11, the cotton crop in China & Pakistan was damaged by bad weather and the global production fell. This led to an increase in cotton prices. The boom in prices was also fuelled by speculative trading in commodities which increased prices beyond fundamentals.

India had exported 8.5 million bales of cotton in 2009-10. In September 2010, the Government of India announced a cap of 5.5 million bales of cotton for exports, around 18% of the estimated production of 31.5 million bales (of 375 lbs) in the current cotton season (CS) 2010-11. This lead to lesser availability of cotton for trade and with high import demand from China, international prices rose during the month. Prices in India also increased. The Cotlook A index rose by 133% from $1 per pound in September, 2010 to about $2.33 per pound in March, 2011 due to limited availability for exports on the back of restrictions by India coupled with robust demand from China and traditional importing countries. Indian Shankar 6 rose in tandem from Rs.37,000/ candy in Sept 2010 to Rs.60,000/ candy in March 2011.

In line with cotton prices, cotton yarn prices also continued to remain high. This increase was in fact more than the increase in cotton prices due to pent up demand in the system where the pipeline of yarn stocks was at very low levels and also due to increased demand from a recovering global economy. Cotton yarn prices touched a high of $6.50/kg. To look at this in perspective, the average of the last 20 years was around $3/kg, with $4.5/kg being the previous all time high in cotton yarn prices. These prices have since corrected and touched around $4.50-$5.00 in the middle of May 2011.

In order to curtail the rise in cotton yarn prices, the Indian Government had imposed a limit of 720 mln kgs on cotton yarn to be exported in FY 2010-11.

Outlook for Cotton Prices:

These high prices are not expected to sustain, in part on expectations of increased acreage, particularly in US, China & Africa. Chinas import demand is also expected to slow down on a combination of high market prices, stronger output and competition from synthetic fibres. China has also planned a cotton purchase-and-reserve policy in 2011 with a view to stabilising prices in the new season. Pakistan, where floods devastated cotton crops in the 2010-11 season, is another market which is likely to see a substantial increase in cotton output from previous year.

Overall, the world market is expected to remain structurally tight (although better than FY 2010-11), but this will not be fully apparent until later in the season when the new crop stocks are drawn down. Global cotton production is expected to increase by about 13% from 24.5 million tonnes in cotton season 2010-11 (Oct to Sept) to 27.5 million tonnes in cotton season 2011-12. The closing stock of 2011-12 is expected to be around 10.5 million tons which is higher than last 2 years but still lower than normal closing stock levels in the past. The stock-to-use ratio is expected to improve to about 42% but will still be lower than the normal 48-52% in the past (excluding last 2 years).

In anticipation of a bumper cotton crop this year, global cotton prices as of now have already come off their previous highs. The Dec New York future is significantly lower than the current New York future. Global yarn prices are decreasing in line with the cotton prices. The anticipation in the market is that prices may come off further and therefore the demand for yarn has reduced as buyers are waiting for lower prices to buy.

Overall, this year is likely to be turbulent and may have adverse impact on the operations of the Industry at large. However because of prudent cotton buying practices and conservative financial norms, Vardhman may not get as much affected as the rest of the spinning industry.

Technology Upgradation Fund Scheme (TUFS):

TUFS had been suspended temporarily by the government in June 2010. The Scheme has now been re-instated with a few changes; (i) Capital subsidy will now be available on looms for weaving as well. (ii) a 5% interest reimbursement may be given to the spinning units (against 4% earlier) if the unit is set up with matching downstream capacity in weaving/processing. (iii) A cap of Rs.1,982 crores has been put on the total subsidy which will be given for the next one year. This has been allocated between various sectors.

The sunset clause of the scheme remains unchanged at March 31, 2012. All loans sanctioned till that date will be eligible for subsidy for the life of the loan.

Women Empowerment at Vardhman:

Vardhman Group has a long tradition of non- discriminatory gender neutral Human Resource (HR) policy based on mutual trust, robust value system and transparent procedures. The top managements commitment to the cause has seen growing female participation at all levels of work spanning from high profile corporate assignments to shop floor operations.

The company has seen entry of female in top management right up to executive director position. This is followed by positions occupied by females of all age groups at different corporate positions including several high profile departments.

Inspite of the fact that textile is a hard core manufacturing industry, the organization has witnessed growing numbers of female working at shop floor. The use of technology and rigorous training imparted at various training centers coupled with stringent safety measures, which includes setting up of various female hostels, has led to a situation where women consist of almost one-fourth of the total workforce. This has led to social empowerment of females belonging to semi skilled category especially from rural background. On the other hand, the organization has benefited handsomely in terms of higher commitment and increased discipline at shop floor leading to improved productivity and better working environment.

B) FINANCIAL ANALYSIS AND REVIEW OF OPERATIONS:

- Production & Sales Review:

During the year under review, your company has registered a turnover of Rs. 3,636.96 crore as compared to Rs. 2,767.22 crore showing an increase of 31.43% over the previous year turnover. The export of the Company increased from Rs. 704.00 crore to Rs.1,218.26 crore, showing an increase of 73.05% over the previous year mainly due to price rise and better product/market penetration. The business wise performance is as under:- a). Yarn:

The production of Yarn increased from 126,146 MT to 130,861 MT during 2010-2011.The sales revenue of yarn increased from Rs. 1,476.99 crore to Rs. 2,041.06 crore during the year under review.

b). Steel:

The steel business of the Company stand vested in Vardhman Special Steels Limited w.e.f 1.1.2011 pursuant to the scheme of Arrangement and Demerge as sanctioned by Honble Punjab & Haryana High Court. However for the nine months ending 31st, December 2010, the production of steel ingots/billets has been 64,581 MT and that of Rolled products has been 57,060 MT.

c). Fabric:

During the year, the production of processed fabric increased from 60.78 million meter to 75.44 million meter, showing an increase of 24.12% over the previous year. The sales revenue of the processed fabric also increased from Rs. 556.52 crore to Rs. 828.20 crore showing an increase of 48.81% over the previous year.

- Profitability:

The Company earned profit before depreciation, interest and tax of Rs. 944.69 crore as against Rs. 594.63 crore in the previous year. After providing for depreciation of Rs. 226.02 crore (Previous year Rs. 220.87 crore), interest of Rs. 109.81 (Previous Year

86.73 Crore), provision for current tax Rs. 134.50 crore (Previous year Rs. 56.75 crore), provision for deferred tax (net of adjustments), Rs. 4.65 crore (Previous year Rs. 16.51 crore), the net profit from operations worked out to Rs. 469.71 crore as compared to Rs. 213.76 crore in the previous year.

- Resources Utilisation:

a). Fixed Assets:

The gross fixed assets (including work-in-progress) as at 31st March, 2011 were Rs. 3,822.83 crore as compared to Rs. 3,611.65 crore in the previous year.

b). Current Assets:

Debtors outstanding for more than six months were Rs. 11.37 crore as compared to Rs. 13.00 crore in the previous year. The net current assets as on 31st March, 2011 were Rs. 2,328.12 crore as against Rs. 1,769.52 crore in the previous year. Inventory level was at Rs. 1,598.39 crore as compared to the previous year level of Rs. 1,107.46 crore.

- Financial Conditions & Liquidity:

The Company presently enjoys a rating of "AA with stable outlook" and "P1+" from Credit Rating Information Services of India (CRISIL) for long term and short term borrowings respectively. Management believes that the Companys liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:- (Rs. in crore)

2010-2011 2009-2010

Cash and Cash equivalents:

Beginning of the year 222.07 357.21

End of the year 48.77 222.07

Net cash provided (used) by:

Operating Activities (24.10) (79.72)

Investing Activities (327.45) (97.06)

Financial Activities 182.63 41.64

Transfer to VSSL on Demerger (4.38) -

C) INTERNAL CONTROL SYSTEM:

The Company has well defined internal control system. The Company takes abundant care to design, review and monitor the working of internal control system. Internal Audit in the organization is an independent appraisal activity and it measures the efficiency, adequacy and effectiveness of other controls in the organization. All significant issues are brought to the attention of the Audit Committee of the Board.

D) MANAGEMENT PERCEPTION OF RISK AND CONCERN:

One of the key challenge to the textile industry is related to raw material prices mainly cotton prices which has seen very steep hike in 2010-11 and the same is still volatile creating uncertainties for textile manufacturers.

The second important challenge is rising energy prices which could adversely impact the profitability of textile mills. The third main issue for the textile industry is the non -availability of skilled manpower coupled with high labour cost prevailing in the country.

Uncertainty in the government export policy is other major challenge for the textile industry under which the government banned cotton yarn exports last year which lead to high inventory cost and losses to the indian textiles manufacturers and there is a fear of withdrawal of duty draw back benefits etc. to the exporters.

We are making all efforts to cope up with the challenges through continuous cost reduction, process improvements, imparting training to the workforce on the continued basis, process improvements and improved customer services to mitigate the growing cost pressure

E) HUMAN RESOURCES/INDUSTRIAL RELATIONS:

The Company continues to lay emphasis on building and sustaining an excellent organization climate based on human performance. Performance management is the key word for the company. During the year the Company employed over 24000 employees.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shop floors of the various plants.

3. SUBSIDIARIES:

The Company has following subsidiary companies the details of profitability of which are given below:- VMT Spinning Company Limited (VMT)

Business of this subsidiary of the Company which is a Joint Venture with Marubeni Corporation and Toho Rayon Company Limited of Japan remained good. The sales revenue of the Company has increased to Rs. 128.34 crore from Rs. 101.65 crore in the last year and the net profits of the Company increased from Rs. 10.13 crore to Rs. 14.67 crore. Out of the total present paid-up capital of Rs. 20.70 crore, your Company holds 73.33 %. The Board of Directors of VMT has recommended a dividend of 12% for the year 2010-2011.

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged in the business of investments in the shares etc. The earnings of the company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the year the company has earned a net profit of Rs.1.06 crores.

Vardhman Acrylics Limited (VAL)

Vardhman Acrylics Limited (VAL) is another subsidiary of the Company which is engaged in the business of manufacturing of Acrylic Fibre. Presently the company holds 58.74% shares in this subsidiary. During the Financial Year 2010-2011, VAL recorded a sales volume of Rs. 430.33 crore as against Rs. 286.74 crore, an increase of 50.08% over the previous year, however the net profit for the year has decreased to Rs. 37.64 crore from Rs. 43.44 crore in the previous year.

Vardhman Yarns & Threads Limited (VYTL)

This subsidiary of the Company, a Joint Venture with American & Effird Inc. (A&E), is engaged in the business of Threads Manufacturing and Distribution. The Company has a joint venture partnership of 51:49 with A&E, which is the second largest global player in Threads Manufacturing and Distribution, in VYTL. During the year under review, the gross sales of this Company were Rs. 426.10 crore and the

Profit after tax was Rs. 49.31 crore. The Board of Directors of this Company has recommended a dividend @ 23% for the year 2010-11.

Vardhman Nisshinbo Garments Company Limited (VNGL)

This subsidiary of the Company which is a Joint Venture partnership of 51:49 with Nisshinbo Textiles Inc., Japan for manufacturing world class shirts started production in the fag end of the year and it incurred a loss of Rs. 1.99 crore as its operations are stabilizing.

Vardhman Special Steels Limited (VSSL)

During the year Vardhman Special Steels Limited was got incorporated as the 100% subsidiary of the Company. Pursuant to the Scheme of Arrangement & Demerger between Vardhman Textiles Limited and Vardhman Special Steels Limited and their respective shareholders & creditors, the Steel Business Undertaking of Vardhman Textiles Limited stand vested in Vardhman Special Steels Limited w.e.f. 01.01.2011 and the shareholders holding shares in Vardhman Textiles Limited were to be allotted one share for every five shares held in Vardhman Textiles Limited as on the relevant record date fixed for the purpose i.e. 30.03.2011. The said allottment of shares was made on 08.04.2011 and Vardhman Special Steels Limited ceased to be a subsidiary of the Company w.e.f. 08.04.2011.

4. QUALIFIED INSTITUTIONAL PLACEMENT :

During the year under review, the Company has made a Qualified Institutional Placement (QIP) to Qualified Institutional Buyers of 58,82,352 Equity Shares of Rs. 10/- each at a premium of Rs. 330/- aggregating to approx. Rs. 200 Crores. Consequently, the paid-up capital of the Company has increased to Rs. 63.65 crores.

5. STEEL BUSINESS RE-STRUCTURING :

During the year under review, pursuant to the Scheme of Arrangement & Demerger between Vardhman Textiles Limited and Vardhman Special Steels Limited and their respective shareholders & creditors as approved by the Board of Directors and Shareholders of respective Companies and sanctioned by the Honble High Court of Punjab & Haryana at Chandigarh under Section 391-394 vide its Order dated 12th January, 2011, the Steel Business Undertaking of the Company has been demerged into a separate Company, Vardhman Special Steels Limited w.e.f 1st January, 2011.

6. DIVIDEND:

The Board of Directors of your Company has recommended dividend of Rs. 4.50 per share on the Fully Paid-up Equity Shares of the Company.

7. DIRECTORS:

The nomination of Ms. Amita Narain, the nominee of IDBI Ltd. on the Board of the Company, was withdrawn by IDBI Ltd. w.e.f. 21.06.2010 and Mr. S. Padmanabhan was nominated in her place.

Mr. Sachit Jain, Mr. Prafull Anubhai and Mr. A. K. Kundra, Directors of the Company, retire by rotation at the conclusion of the forthcoming Annual General Meeting, pursuant to the provisions of Article 108 of the Articles of Association of the Company and being eligible, offer themselves for re-appointment. The Board recommended their re-appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.

Mr. S.P. Oswal was re-appointed as the Chairman and Managing Director of the Company for a further period of 5 years w.e.f. 01.06.2010.

8. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Corporate Governance Clause of the Listing Agreement is annexed to the report on Corporate Governance.

9. AUDITORS:

M/s. S.C. Vasudeva & Company, Chartered Accountants, New Delhi, Auditors of the Company, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

10. AUDITORS REPORT:

The Statutory Auditors of the Company have submitted Auditors Report on the accounts of the Company for the accounting year ended March 31, 2011. In their report, they have made an observation that loss, if any, on valuation of open derivative options could not be determined by the Company due to certain reasons as specified in Note 13 of the Notes to Accounts. The ultimate outcome of these transactions and their effect on these accounts cannot be ascertained at this stage.

As you are aware that a part of revenue of your Company comes from export sales and the company is also having exposure towards imports and as such Company has foreign currency fluctuation exposure. The Company also hedges its foreign currency fluctuation exposure by way of foreign currency derivative options. The Company has taken various USD/INR options from banks. As at March 31, 2011, there are 15 options (Previous Year 7) against exports and 5 options (Previous Year Nil) against Imports having a maturity period up to January 2016 (Previous Year June 2013). These derivative options are proprietary products of banks which do not have a ready market and are not tradeable in the open market. These options are marked to a model, which is bank specific instead of being marked to market. In view of the significant uncertainty associated with the above derivative options, the ultimate outcome of which depends on future events which are not under the direct control of the company, the resultant gain/loss if any, on such open derivative options cannot be determined at this stage and has accordingly not been accounted for in the books of accounts. The other points of Auditors Report are self - explanatory and needs no comments.

11. COST AUDITORS:

The Board of Directors has re-appointed M/s. Ramanath Iyer & Company, Cost Accountants, New Delhi as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956, for the year 2011-12. The Cost Auditors Report for the financial year 2011-2012 will be forwarded to the Central Government as required under law.

12. STATEMENT OF PARTICULARS OF EMPLOYEES:

A Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 is enclosed and forms part of this report.

13. GROUP:

The Company, inter-alia with the following entities, constitutes a ‘Group as defined under the Monopolies and Restrictive Trade Practices Act, 1969: -

a) Vardhman Holdings Limited

b) Vardhman Special Steels Limited

c) VTL Investments Limited

d) Adinath Investment and Trading Company

e) Devakar Investment and Trading Company Private Limited.

14. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major emphasis in your Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 217(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are annexed hereto and form part of this report.

15. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section-217 (2AA) of the Companies Act, 1956, the Directors confirm that in the preparation of the annual accounts, the applicable accounting standards have been followed;

a. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profit of the Company for the year ended on 31st March, 2011;

b. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

c. the annual accounts have been prepared on a going concern basis.

16. ACKNOWLEDGMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

FOR AND ON BEHALF OF THE BOARD

(S.P. OSWAL) PLACE : NEW DELHI CHAIRMAN &

DATED : 9th May, 2011 MANAGING DIRECTOR

---

Mar 31, 2010

The Board of Directors of your Company has pleasure in presenting the 37 Annual Report on the affairs of the Company together with the Audited Accounts of the Company for the year ended, 31 March, 2010.

1. FINANCIAL RESULTS:

The Financial Results for the year are as under :- (Rs. in Crore)

PARTICULARS 2009-2010 2008-2009

Turnover 2,767.22 2,495.38

Profit before Depreciation, Interest & Tax (PBDIT) 594.63 371.37

Interest and Financial expenses 86.73 102.34

Profit before Depreciation and Tax (PBDT) 507.89 269.03

Depreciation 220.87 207.32

Profit before Tax (PBT) 287.02 61.71

Provision for Tax -Current 56.75 0.17

- Fringe Benefit Tax - 0.91

- Deferred Tax (Net of Adjustment) 16.51 33.28

Profit after Tax (PAT) from cntinuing operations 213.76 27.35

Profit on sale of discontinued operations - 113.42

Add: Debenture Redemption Reserve - -

Corporate Dividend Tax written back 1.95 1.25

Balance brought forward 60.85 57.34

Balance available for appropriation 276.56 199.36

Appropriations:

Proposed Dividend on:

- Equity shares 17.33 11.55

- Corporate Dividend Tax 2.88 1.96

20.21 13.51

Transfer to General Reserve 125.00 125.00

Surplus carried to Balance Sheet 131.35 60.85

276.56 199.36

Earnings per share (Rs.)

- Basic 37.00 24.37

- Diluted 31.83 18.48 Dividend per share (Rs.) 3.00 2.00

2. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A) Textile Business:

World economy has shown initial indications of recovery after a severe spell of recession. The world economy is expected to grow by 4.2 percent in 2010 and projected to maintain the growth momentum in the next 5 years. However, the consumer confidence in major importing countries like USA and EU has been lagging behind economic growth projections and may take some more time before showing any convincing revival. Though some growth has been seen in the world trade of textile and clothing especially post Sept. 2009. The USA textile and clothing imports, which declined by 13 percent in 2009 over 2008 has increased by 1 percent during Jan-Feb 2010. The partial explanation of increase in textile and clothing imports may be attributed to the pressure on retailers caused by very low inventory levels. It has resulted into creation of demand for textile and clothing products in international market. The domestic market is also showing some signs of improvement leading to overall increase in textile manufacturing in the country.

The industry has attracted investment to the tune of Rs. 2 lacs crore under TUF for capacity expansion and modernization, which has started paying yield. It is evident from the increased textile manufacturing in the country in the form of increased spun yarn production. The spun yarn production is expected to increase at about 4200 mn kg in 2009-10 and expected to grow by about 8% to 4500 mn kg in 2010-11. The domestic deliveries of spun yarn has also been growing consistently showing increased activities in the entire textile value chain.

There are some areas of concerns also, which need to be stated here. Along-with recovery, the textile industry is also facing increase in input prices in sync with the global trends. In addition to appreciating rupee, free export of cotton followed by withdrawal of export incentives on cotton yarn are also causing concerns for the sustained recovery in the textile industry. In our view, there is need for an integrated approach to be adopted for the development of the textile and clothing industry in the country. Such an approach is required to ward off any such situation where the strengths of one segment of the textile industry is being undermined for passing temporary relief to another segment of the industry leading to permanent damage to the complete textile value chain. In our views, if any segment suffers from some systemic disadvantages affecting its global competitiveness, it should be overcome through suitable incentives mechanism without affecting any other segment of the industry.

Vardhman has utilized the opportunity offered by the global recession for introspection to identify areas of improvement i.e. fine tuning supply chain management and resource optimization to strengthen our competitiveness by offering more value to customers in terms of high value added products. It is a matter of pleasure to note that such initiatives have paid us well, enhanced our learning, strengthen our resolve and increase our capabilities to overcome such events in future.

We have a firm faith in the bright future of textile industry in India. The Group is planning expansion in spinning, dyeing, weaving and fabric processing capacities to build on economies of scales and develop capabilities to serve the global market.

B) Steel business:

Our steel business is dependent on demand for auto and other related users. The demand in auto industry which was suppressed because of global economic slow down has now revived since third quarter of 2009-10. Simultaneously, their has been a steep rise in raw material cost like shredded scrap, sponge iron etc. because of which there is more market driven pressure on pricing of finished steel. However, the auto industry is projecting healthy growth during 2010-11 and it is expected that the demand shall remain firm enabling steel plants in India to utilize their installed capacity in full.

The Company is also considering to restructure this business and have appointed the external advisors to help examine various options to restructure the same.

C) Financial Analysis and Review of Operations:

- PRODUCTION & SALES REVIEW:

During the year under review, your company has registered a turnover of Rs. 2,767.22 crore as compared to Rs. 2,495.38 crore showing an increase of 10.89% over the previous year turnover. The export of the Company increased from Rs. 627.04 crore to Rs. 704.00 crore, showing an increase of 12.27% over the previous year owing to enhanced production and better product/market penetration. The business wise performance is as under:- a). Yarn:

The production of Yarn increased from 115,888 MT to 126,146 MT during 2009-2010.The sales revenue of yarn increased from Rs. 1,324.72 crore to Rs. 1,476.99 crore during the year under review.

b). Steel:

During the year, the production of steel ingots/billets has been 62,110 MT compared to 53,078 MT of the previous year and that of Rolled products has been 56,581 MT compared to 51,471 MT of the previous year. The sales revenue of the division has been Rs. 276.38 crore (Previous Year Rs. 321.74 crore).

c). Fabric:

During the year, the production of processed fabric increased from 51.35 million meter to 60.78 million meter, showing an increase of 18.36% over the previous year. The sales revenue of the processed fabric also increased from Rs. 482.17 crore to Rs. 556.52 crore showing an increase of 15.42% over the previous year.

- PROFITABILITY:

The Company earned profit before depreciation, interest and tax of Rs. 594.63 crore as against Rs. 371.37 crore in the previous year. After providing for depreciation of Rs. 220.87 crore, (Previous year Rs. 207.32 crore), interest of Rs. 86.73 (Previous Year 102.34 crore), provision for current tax Rs. 56.75 crore (Previous year Rs. 0.17 crore), provision for deferred tax (net of adjustments), Rs. 16.51 crore (previous year Rs. 33.28 crore), and provision for Fringe Benefit Tax of Rs NIL (Previous Year Rs. 0.91 crore) the net profit from operations worked out to Rs. 213.76 crore as compared to Rs. 27.35 crore in the previous year.

- RESOURCES UTILISATION:

a). Fixed Assets:

The gross fixed assets (including work-in-progress) as at 31 March, 2010 were Rs. 3,611.65 crore as compared to Rs. 3,414.27 crore in the previous year.

b). Current Assets:

Debtors outstanding for more than six months were Rs. 13.00 crore as compared to Rs. 22.87 crore in the previous year. The net current assets as on 31 March, 2010 were Rs. 1,769.52 crore as against Rs. 1370.30 crore in the previous year. Inventory level was at Rs. 1,107.46 crore as compared to the previous year level of Rs. 620.10 crore.

- FINANCIAL CONDITIONS & LIQUIDITY:

The Company enjoys a rating of "AA-" with stable outlook and "P1+" from Credit Rating Information Services of India (CRISIL) for long term and short term borrowings respectively. Management believes that the Companys liquidity and capital resources should be sufficient to meet its expected working capital needs and other anticipated cash requirements. The position of liquidity and capital resources of the Company is given below:-

(Rs. in crore) 2009-2010 2008-2009

Cash and Cash equivalents:

Beginning of the year 357.21 62.70

End of the year 222.07 357.21

Net cash provided (used) by:

Operating Activities (79.72) 447.04

Investing Activities (97.06) (125.53)

Financial Activities 41.64 (26.99)

D) Internal Control System:

The Company has well defined internal control system. The Company takes abundant care to design, review and monitor the working of internal control system. Internal Audit in the organization is an independent appraisal activity and it measures the efficiency, adequacy and effectiveness of other controls in the organization. All significant issues are brought to the attention of the Audit Committee of the Board.

E) Management perception of Risk and Concern:

One of the major challenges to the textile industry is the continued appreciation in the Indian rupee against US dollar, which has serious implication on textile exports. Being highly competitive industry, increase in the external value of rupee would cripple the competitiveness of the industry. Another important issue is availability, quality and the price of power. The availability of good quality power at reasonable prices is critical for sustainability of the industry. However, the cost of power has been continuously increasing, adding to the input cost pressure in the industry. We hope that power situation will improve in the coming year.

Our major raw material-Cotton is agriculture produce, which suffers from climatic volatility in the major cotton producing countries. In addition, growing demand as well as overall increase in prices of commodities in the world has pushed up the prices of domestic cotton leading to pressure on the textile industry.

The differentiated treatment for different sectors of textile industry in government policy is also a serious development. The proposal to withdraw export incentives on cotton yarn exports can be seen in this respect. The integral approach is required for the growth of the industry in the country. While the country is surplus in cotton and it is anachronistic that we may discourage exports of cotton yarn while we remain committed to raw material i.e. cotton exports.

We are making all efforts to cope up with the challenges through continuous cost reduction, process improvements and improved customer services to mitigate the growing cost pressure.

F). Human Resources/Industrial Relations:

The Company continues to lay emphasis on building and sustaining an excellent organization climate based on human performance. Performance management is the key word for the company. During the year the Company employed over 24,788 employees.

Pursuit of proactive policies for industrial relations has resulted in a peaceful and harmonious situation on the shopfloors of the various plants.

3. SUBSIDIARIES:

The Company has following subsidiary companies the details of profitability of which are given below:- VMT Spinning Company Limited (VMT)

The business of this subsidiary of the Company which is a Joint Venture with Marubeni Corporation and Toho Rayon Company Limited of Japan remained steady. However, the sales revenue of the Company has marginally increased to Rs. 101.65 crore from Rs. 100.98 crore but the net profits of the Company decreased from Rs. 15.45 crore to Rs. 10.13 crore due to depressed international market and sharp appreciation of Rupee vis-a-vis US Dollar. Out of the total present paid-up capital of Rs. 20.70 crore, your Company holds 73.33%. The Board of Directors of VMT has recommended a dividend of 12% for the year 2009-2010.

VTL Investments Limited (VTL)

This 100% subsidiary of your Company is engaged with the business of investments in the shares etc. The earnings of the company mainly comes from the dividend/interest earned on its investments and profits made on sale of investments. During the year the company has earned a net profit of Rs.1.55 crore.

Vardhman Acrylics Limited (VAL)

Vardhman Acrylics Limited (VAL) is another subsidiary of the Company which is engaged in the business of manufacturing of Acrylic Fibre. The works of the company is situated at Jhagadia in Gujarat. Presently the company holds 58.74% shares in this subsidiary. During the Financial Year 2009-2010, VAL recorded a sales volume of Rs. 286.74 crore as against Rs. 253.90 crore, an increase of 12.93% over the previous year. The net profit for the year has substantially increased to Rs. 43.44 crore from Rs. 4.23 crore in the previous year.

Vardhman Yarns & Threads Limited (VYTL)

This subsidiary of the Company which is a Joint Venture with American & Effird Inc. (A&E) which is second largest global player in Threads Manufacturing and Distribution with a partnership of 51:49 is engaged in the business of Threads Manufacturing and Distribution. During the year under review, the gross sales of this Company were Rs. 377.16 crore and the Profit after tax was Rs. 41.37 crore.

The Board of Directors of this Company has recommended a dividend @ 19.3%, on its paid up equity share capital, for the year 2009-10.

Vardhman Texgarments Limited (VTGL)

During the year, your Company has entered into a Joint Venture Agreement with Nisshinbo Textile Inc., Japan (“Nisshinbo”) for manufacturing world class shirts with a partnership of 51:49 in this JV Company. Nisshinbo is a world class textile manufacturer with comprehensive operations including spinning, weaving, knitting, finishing and sewing. The foundation stone for the manufacturing facility was laid on 14 November, 2009.The project is being set-up at Focal Point in Ludhiana with a capacity of 1.8 million shirts per annum. The estimated capital cost for the project is Rs. 38 crores, to be financed partly from equity and partly from term loans. The Company will supply majority of its production for international markets through Nisshinbo. The Company shall also manufacture shirts for supply to the domestic brands. Nisshinbo shall provide technical assistance for setting up the facilities and for the manufacturing operations.

4. DIVIDEND:

The Board of Directors of your Company has recommended a dividend of Rs. 3/- per share on the Fully Paid-up Equity Shares of the Company.

5. DIRECTORS:

The Board of Directors had appointed Mr. Shravan Talwar and Mrs. Suchita Jain in its Meeting held on 29 January, 2010 as Additional Directors on the Board of the Company, pursuant to Article 105 of the Articles of Association of the Company and Section 260 of the Companies Act, 1956. Also, Mr. Neeraj Jain was appointed as the Additional Director of the Company w.e.f 01.04.2010 by the Board of Directors in its meeting held on 31 March, 2010, pursuant to Article 105 of the Articles of Association of the Company and Section 260 of the Companies Act, 1956. Further the Board of Directors in its Meeting held on 31 March, 2010 had appointed Mrs. Suchita Jain and Mr. Neeraj Jain as Executive Directors for a period of five years and three years respectively w.e.f 01.04.2010, subject to the approval of the members in the next Annual General Meeting of the Company. The Board of Directors has also re-appointed Mr. Sachit Jain as an Executive Director for a further period of five years w.e.f 30.03.2010 in its Meeting held on 31st March, 2010 and Mr. S. P. Oswal as the Chairman & Managing Director for a further period of five years w.e.f 1.06.2010, in its Meeting held on 7th May, 2010, subject to the approval of the members in the next Annual General Meeting.

The Company has received notices from some members under section 257 of the Companies Act, 1956, proposing the candidature of Mrs. Suchita Jain, Mr. Shravan Talwar and Mr. Neeraj Jain as Directors of the Company. Requisite approval for their appointment is being sought at the ensuing Annual General Meeting.

Mr. A.K. Purwar and Mr. D.L. Sharma, Directors of the Company, retire by rotation at the conclusion of the forthcoming Annual General Meeting, pursuant to the provisions of Article 108 of the Articles of Association of the Company and being eligible, offer themselves for re- appointment. The Board recommended their appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.

6. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. A separate report on Corporate Governance forming part of the Annual Report of the Company is annexed hereto. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Corporate Governance Clause of the Listing Agreement is annexed to the report on Corporate Governance.

7. AUDITORS:

M/s. S.C. Vasudeva & Company, Chartered Accountants, New Delhi, Auditors of the Company, retire at the conclusion of the forthcoming Annual General Meeting and being eligible, offer themselves for re-appointment.

8. AUDITORS REPORT:

The Statutory Auditors of the Company have submitted Auditors’ Report on the accounts of the Company for the accounting year ended March 31, 2010. In their report, they have made an observation that loss, if any, on valuation of open derivative options could not be determined by the Company due to certain reasons as specified in Note 13 of the Notes to Accounts. The ultimate outcome of these transactions and their effect on these accounts cannot be ascertained at this stage.

As you are aware that a part of revenue of your Company comes from export sales and as such Company has foreign currency fluctuation exposure. Your Company hedges its foreign currency fluctuation exposure against exports by way of foreign currency derivative options also. During the year, the Company has taken various foreign currency options from various banks and as at March 31, 2010, there were 7 options outstanding having a maturity period up to June 2013. These derivative options are proprietary products of banks which do not have a ready market and are not tradeable in the open market. These options are marked to a model, which is bank specific instead of being marked to market. In view of the significant uncertainty associated with the above derivative options, the ultimate outcome of which depends on future events which are not under the direct control of the company, the loss if any, on such open derivative options cannot be determined at this stage and has accordingly not been provided in the books of account. The other points of Auditors’ Report are self-explanatory and need no comments.

9. COST AUDITORS:

The Board of Directors had re-appointed M/s. Ramanath Iyer & Company, Cost Accountants, New Delhi as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956, for the year 2009-10. The Cost Auditors Report for the financial year 2009-2010 will be forwarded to the Central Government as required under law.

10. STATEMENT OF PARTICULARS OF EMPLOYEES:

A Statement of Particulars of Employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 is enclosed and forms part of this report.

11. GROUP:

The Company, inter-alia with the following entities, constitutes a Group as defined under the Monopolies and Restrictive Trade Practices Act, 1969: -

a) Vardhman Holdings Limited

b) VTL Investments Limited

c) Adinath Investment and Trading Company

d) Devakar Investment and Trading Company Private Limited

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Energy conservation continues to be an area of major emphasis in your Company. Efforts are made to optimize the energy cost while carrying out the manufacturing operations. Particulars with respect to conservation of energy and other areas as per Section 217(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are annexed hereto and form part of this report.

13. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section-217 (2AA) of the Companies Act, 1956, the Directors confirm that in the preparation of the annual accounts, the applicable accounting standards have been followed;

a. appropriate accounting policies have been selected and applied consistently, and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March, 2010 and of the profit of the Company for the year ended on 31 March, 2010;

b. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

c. the annual accounts have been prepared on a going concern basis.

14. ACKNOWLEDGEMENT:

Your Directors are pleased to place on record their sincere gratitude to the Government, Financial Institutions, Bankers and Business Constituents for their continued and valuable co-operation and support to the Company. They also take this opportunity to express their deep appreciation for the devoted and sincere services rendered by the employees at all levels of the operations of the Company during the year.

FOR AND ON BEHALF OF THE BOARD

(S.P. OSWAL) PLACE : NEW DELHI CHAIRMAN &

DATED : 7th May, 2010 MANAGING DIRECTOR